Egyptian equity firm announces first investment

An Egypt focused private equity firm, The Lorax Capital Partners Fund II (LCP), has announced its first investment, acquiring a minority stake in DSQ Group.

DSQ Group is one of the leading loyalty and rewards solution providers across Central Europe, the Middle East, and the African region (CEMENAP) assisting more than 45 local and international clients. The company owns two sub-companies which are Dsqaures and Lucky. 

 LCP Fund II invests in DSQ Group’s Dsquares and Lucky

The aim of the significant capital increase through LCP’s first investment is to accelerate the growth of new businesses and contribute to the expansion of DSQ Group’s geographical footprint locally and internationally.

In addition to the capital increase, LCP has acquired a minority stake in Ezdehar Egypt Mid-Cap Fund. Furthermore, Algebra Ventures, one of Egypt’s leading venture capital (VC) firms, and a current shareholder in DSQ Group increased its investment in the company.

The LCP Fund II invests in Dsquares, a company founded in 2011 that offers businesses end-to-end loyalty and rewards solutions. Dsquares designs personalised programs for businesses, offers operational management of any technical and commercial feature, generates analytical reports, and provides support throughout the phases of developing projects.

In an official press release, Marwan Kenawy, Co-founder and CEO of Dsquares explains that the transaction from LCP will enhance the company and contribute to its aim of expansion.

“The LCP partnership and investment will help Dsquares expedite its clients and merchants expansion plans in the Middle East, Africa, and Europe and maintain its position as the loyalty & rewards solutions leader in the region.” 

The Lucky app, launched in 2019 by DSQ Group is a mobile platform that offers discounts and convenient financial services to its customers.

Momtaz Moussa, Co-founder and Managing director of Lucky, comments on their transition to eCommerce.

“By becoming the leading offers platform, Lucky has been digitizing its users’ commerce transactions. We are utilizing this data to provide a more convenient purchasing experience as well as maximizing savings and payment flexibility. That level of understanding of user behavior is now helping us introduce financial products that would otherwise be inaccessible to most of our users.” 

DSQ Group’s expansion plans

The investment from LCP will accelerate the Group’s expansion plans across the CEMENAP region. 

Dsquares operates in multiple business sectors including banking, telecom, fast-moving consumer goods (FMCG), retail, oil, and gas. 

The company has a merchant network that reportedly reaches over 900 brands and more than 11 000 outlets in Egypt, Jordan, Romania, Kenya, Tanzania, Morocco, KSA, and UAE. 

Lucky has reached over five million downloads for its mobile app. The platform is a network of thousands of merchants who are in the industry for dining, entertainment, fashion, electronics, fitness, hospitality, furniture, home appliances, etc.

Ayman Essawy, Co-founder and COO of Dsquares explains that Lucky has significantly accelerated the DSQ Group’s expansion plan on account of its success. 

“Lucky continues to be very successful in attracting new users as well as increasing engagement of its existing user base. Egypt is our first market and we have plans to further expand our services across relevant markets in the Middle East & Africa. We believe that this strategic partnership with LCP will put both Dsquares & Lucky on the right track to achieve their future goals.” 

Read more: Egypt’s Vezeeta raises $40m in Series-D round
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