IFC Announces $225M VC Platform to Support Early-stage Startups in Africa, Central Asia, Middle East
A $225 million venture financing platform has been developed by the International Finance Corporation (IFC) to support early-stage businesses in Africa, the Middle East, Central Asia, and Pakistan.
In order to “develop them into scalable companies that can attract mainstream equity and debt finance,” the IFC, a member of the World Bank, will invest in tech startups using equity and “equity-like” capital.
The organization said in a statement that it will also use the platform, which is independent of industry, to collaborate closely with other World Bank members to advocate for legislative changes, industry assessments, and other adjustments that can strengthen the venture capital ecosystems in these areas.
The IFC will also advocate for increased funding from the private sector and other development organizations. The Blended Finance Facility of the Private Sector Window of the International Development Association, which de-risks investments in low-income countries, has so far provided it with an additional $50 million in support.
According to Makhtar Diop, managing director of IFC, “Support for entrepreneurship and digital transformation is crucial to economic growth, job creation, and resilience.”
“IFC’s Venture Capital Platform will support nations’ efforts to create transformative tech ecosystems and assist tech companies and entrepreneurs in growing during a period of capital shortage. We want to support the creation of locally produced, cutting-edge solutions that are not only applicable to developing nations but can also be exported to the rest of the world, the official said.
The IFC hopes to fill this gap, which has been widened by the funding slowdown spurred by macroeconomic challenges, in its focal regions’ continued underrepresentation in global capital investment.
The new platform complements IFC’s Startup Catalyst Program, which is a component of its investments and initiatives to engage with ecosystems in Pakistan, the Middle East, Central Asia, and Africa.
Toters, an on-demand delivery service in Lebanon and Iraq, TradeDepot, a B2B e-commerce firm that connects brands with merchants, and Twiga Foods, a Kenyan technological food distribution platform, have all received direct funding from the institution thus far. It intends to make investments through the platform outside of important hubs including Egypt, Kenya, Nigeria, Pakistan, Senegal, and South Africa.
