When science students graduate from university, they have grand expectations. It’s finally time to put on that white coat and start examining samples and conducting experiments in the lab, driving scientific research and development forward.
The reality, however, is often quite different.
“Once they get into the lab, they realize that the equipment is old — if it is available at all — and that the machines are mediocre,” says Omar Sakr, founder of Nawah-Scientific.
That is the gap that Sakr is working to bridge with Egypt’s first private multidisciplinary research center empowering scientists working in the fields of natural and medical sciences by providing them with access to state-of-the-art equipment and related know-how.
When someone wants to run experiments or studies on samples, they embark on a journey through Egypt’s different governorates and their universities in order to find the needed equipment.
“Once you get there, it can take up to two months to get a place to run a test that may take just 20 minutes. That is why it can take up to five years to get your Master’s degree in life sciences instead of just two years — this is very inefficient,” he adds.
There are about 100,000 registered scientists in Egypt and the number is rapidly increasing. Hence, the demand of scientists for equipment and labs where they can conduct research is grossly unmatched with market supply.
“Anyone anywhere can conduct a state-of-the-art experiment, regardless of capacity or wealth”
Since launching in 2015, Nawah has seen a 430 percent growth rate in revenues in the first year, and 230 percent growth in the second, breaking even in just 18 months.
Today, a team of 13, of which eight are scientists, run the Nawah-Scientific lab.
Sakr graduated from the Faculty of Pharmacy at Ain Shams University, moved on to the German University in Cairo and concluded his PhD in Geneva. He is currently doing an MBA at Hult University in London.
“In Geneva, a certain machine can be available in each university building, while in all of Egypt, there may only be two or three places that have this equipment. Scientists in Egypt — if they were wealthy enough — outsource their experiments to Germany, the United States, India or South Korea,” the sole founder explains.
The aim of establishing the company was simple: Bring state-of-the-art equipment to Egypt and make it available to the public. Currently, Nawah-Scientific has a 400-square meter lab in Mokattam covering natural and medical sciences.
Through the company’s online platform, anyone across Egypt who wants to run a test on a sample can log onto the website, describe what they want and then have a courier pick up the sample and bring it to the Nawah lab. The scientists there run the tests or experiments and send the results through the website to the owner of the sample within 48 hours.
“Anyone anywhere can conduct a state-of-the-art experiment, regardless of capacity or wealth,” Sakr says.
Nawah-Scientific has received about 6,000 samples from around the country and from abroad. The high profit margins have helped the company break even in its first 18 months, mainly by targeting universities, the research and development (R&D) departments of companies as well as individual researchers.
About 50 percent of revenues came from companies while the remaining 50 percent are channeled by individual researchers. Universities, on the other hand, are more partners than clients.
Scientists can also book an appointment to use a certain machine at the Nawah-Scientific lab and run the experiment themselves. Additionally, the company offers hands-on courses to teach people how to use the machines and equipment at the lab, and has also become an outsourcing destination for R&D processes for other companies in the life sciences industry.
Investors vs scientists
Nawah-Scientific faced a lot of challenges when raising its seed capital, mainly because investors have not seen success stories in the life sciences field, according to Sakr.
“Our industry is not built on minimal viable products (MVPs) or tangible outcomes, but rather on data. If investors are not subject matter experts in the industry, they fear that this data may be fabricated which makes them hesitant to invest,” he adds.
Investors also like assetless models and startups that scale in a viral manner, even though this is quite risky. “In our case, the assets can be sold if we fail and this would ensure at least a 50 percent return on the invested capital, which is still less risky than assetless companies,” he says.
Scientists, on the other hand, are a bit isolated from the ecosystem and fear that investors may steal their ideas. As Sakr says, they don’t know that there are legal frameworks that ensure the scientist’s rights and position when starting a business.
“What we need are specialized life sciences incubators. The problem is that most incubators require prototypes and MVPs when they choose their startups — these are terms that do not really exist in life sciences,” the founder explains.
Meanwhile on the governmental level, private research centers is not a category that exists when registering a company in Egypt. “We need acknowledgement from the state…governmental support is there, but the official paperwork is not helping,” he says.
There is also the challenging and costly process of getting kits, spare parts and chemicals through customs.
Despite the obstacles, the company plans to expand to cover more disciplines in the life sciences industries and acquire more equipment.