The International Finance Corporation (IFC) today launched a $225 million venture capital platform to support early-stage startups in Africa, the 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 World Bank members to champion for regulatory reforms, sector reviews and other changes that can grow the venture capital ecosystem in these regions.
IFC will also rally for additional capital from other development institutions and the private sector. It has so far received an additional $50 million in support 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 innovation is essential to economic growth, job creation, and stability,” said Makhtar Diop, IFC’s managing director, in a statement shared with TechCrunch.
“IFC’s Venture Capital Platform will help tech companies and entrepreneurs scale in times of capital scarcity, creating scalable investment opportunities and supporting countries’ efforts to build transformative tech ecosystems. We want to help develop innovative solutions that are not only relevant to emerging countries but can also be exported to other parts of the world,” he said.
IFC’s focus regions continue to receive a small percentage of global capital financing, and the institution hopes to help bridge this gap exacerbated by the funding slowdown caused by macroeconomic headwinds.
The new platform complements IFC’s Startup Catalyst Program, which is also part of its investments and efforts to tap tech ecosystems in Africa, the Middle East, Central Asia, and Pakistan.
The institution has so far made a direct investment in Twiga Foods, a Kenyan technology food distribution platform; TradeDepot, a B2B e-commerce startup that connects 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 the main hubs such as Egypt, Kenya, Nigeria, Pakistan, Senegal, and South Africa.