The International Finance Corporation (IFC) has launched a $225 million platform to back early-stage startups in Africa, Middle East, Central Asia, an
The International Finance Corporation (IFC) has launched a $225 million platform to back early-stage startups in Africa, Middle East, Central Asia, and Pakistan.
Makhtar Diop, IFC’s managing director during the launch said the platform is set to make equity and “equity-like” investments in tech startups to grow them into scalable ventures that can attract mainstream equity and debt financing.
The World Bank member will develop regulatory reforms, sector analyses and other changes that can grow the venture capital ecosystems in these regions. They further intend to raise more funds 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.
Digitization
“Support for entrepreneurship and digital transformation is essential to economic growth, job creation, and resilience. 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,” said Makhtar Diop.
The IFC’s regions of focus continue to receive a small percentage of the global capital funding, and IFC hopes to help bridge this gap. This is, especially, in the wake of a funding slowdown amidst macroeconomic headwinds. IFC hopes to grow the platform to other startup ecosystems beyond major hubs like Egypt, Kenya, Nigeria, Pakistan, Senegal, and South Africa.
The platform adds to IFC’s Startup Catalyst Program, which is also part of investments and efforts to tap tech ecosystems in Africa, Middle East, Central Asia, and Pakistan. It 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.
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