IFC launches $225M platform to back early-stage startups in Africa, Central Asia, Middle East
The International Finance Corporation (IFC) has today launched a $225 million venture capital platform to back early-stage startups in Africa, Middle East, Central Asia and Pakistan.
The IFC, a member of the World Bank, will make equity and “equity-like” investments in tech startups to “grow them into scalable ventures that can attract mainstream equity and debt financing.”
The institution said in a statement that it will also use the sector-agnostic platform to work closely with other members of the World Bank to champion for regulatory reforms, sector analyses and other changes that can grow the venture capital ecosystems in these regions.
The IFC will also rally for more capital from other development institutions and the private sector. It has so far received an additional $50 million backing from the Blended Finance Facility of the International Development Association’s Private Sector Window, which de-risks investments in low-income countries.
“Support for entrepreneurship and digital transformation is essential to economic growth, job creation, and resilience,” said Makhtar Diop, IFC’s managing director, in a statement shared with TechCrunch.
“IFC’s Venture Capital Platform will help tech companies and entrepreneurs to expand during a time of capital shortage, creating scalable investment opportunities and backing countries’ efforts to build transformative tech ecosystems. We want to help develop homegrown innovative solutions that are not only relevant to emerging countries but can also be exported to the rest of the world,” he said.
The IFC’s regions of focus continue to receive a small percentage of the global capital funding, and the institution hopes to help bridge this gap made worse by the funding slowdown fueled by macroeconomic headwinds.
The new platform adds to IFC’s Startup Catalyst Program, which is also part of its investments and efforts to tap tech ecosystems in Africa, Middle East, Central Asia and Pakistan.
The institution has so far made direct investments in Twiga Foods, a Kenyan technology food distribution platform; TradeDepot, a B2B e-commerce startup connecting brands with retailers; and Toters, an on-demand delivery platform in Lebanon and Iraq. It plans to use the platform to invest in regions beyond major hubs like Egypt, Kenya, Nigeria, Pakistan, Senegal and South Africa.
Source: Techcrunch