The IFC announces $225 million platform that will support early-stage of their development in Africa, Middle East, Central Asia, and Pakistan.
The IFC is one of the members of the World Bank, will through the platform invest in capital and “equity-like” funding for tech startups in order to “grow their businesses into sustainable ventures which can be able to draw large-scale capital and debt financing.”
The bank stated in a statement it would also make use of the platform that is sector-neutral to collaborate alongside other participants of the World Bank to champion for regulatory reforms, sector studies and other adjustments that will increase the number of venture capital firms across these countries.
It is expected that the IFC will also be a rallying point for additional funds through other institutions for development as well as from the private sector. It has already received additional $50 million in funding through the Blended Finance Facility of the International Development Association’s Private Sector Window, which reduces the risk of investing in countries with low incomes.
“Support for digital transformation and entrepreneurship is vital to the growth of our economy as well as job creation and the ability to adapt,” said Makhtar Diop IFC’s managing director in a statement.
“IFC’s Venture Capital Platform will aid entrepreneurs and tech companies to grow during a period of capital scarcity, providing potential investment opportunities that are scalable, and also supporting nations’ efforts to create an ecosystem of technology that is transformative. We’d like to help create indigenous solutions that are not just applicable to emerging economies but also exportable to the world at large,” he said.
The IFC’s areas of focus remain to receive a small portion of capital financing that is available worldwide, and the IFC hopes to fill the gap. This is especially in the aftermath of an economic slowdown that has triggered a reduction in funding problems. IFC is hoping to expand its service to more startup communities that aren’t major hubs such as Egypt, Kenya, Nigeria, Pakistan, Senegal, and South Africa.
The platform is part of the IFC’s Startup Catalyst Program, which is also part of investment in efforts that aim to access into technology ecosystems across Africa, Middle East, Central Asia, and Pakistan.
It has already invested directly into Twiga Foods, a Kenyan technology-driven food distribution platform; TradeDepot, a B2B online retailer that connects brands with retailers as well as Toters the on-demand delivery platform for Lebanon as well as Iraq.