The International Finance Corporation (IFC) today launched a $225 million platform to support startup startups in Africa, the Middle East, Central Asia and Pakistan.
The World Bank member IFC will make equity and “equity-like” investments in tech startups through the platform to “grow them into scalable enterprises that can attract mainstream equity and debt financing.”
The institution said in a statement that it will also use the sector-independent platform to work closely with other members of the World Bank to advocate for regulatory reforms, sector analysis and other changes that can grow venture capital ecosystems in these regions.
The IFC will also rally for more capital from other development agencies and the private sector. It has so far received a $50 million grant from the Blended Finance Facility of the International Development Association’s Private Sector Window, which reduces investment in low-income countries.
“Support for entrepreneurship and digital transformation is essential for economic growth, job creation and resilience,” said Makhtar Diop, chief executive of IFC, in a statement shared with TechCrunch.
“IFC’s Venture Capital Platform will help technology companies and entrepreneurs expand in a time of capital shortage, creating scalable investment opportunities and supporting countries’ efforts to build transformative technology ecosystems. We want to help develop innovative homegrown solutions that are not only relevant for emerging countries, but can also be exported to the rest of the world,” he said.
The IFC’s focus areas continue to receive a small percentage of global capital funding, and IFC hopes to help bridge this gap. This is mainly due to a funding slowdown amid macroeconomic headwinds. IFC hopes to expand the platform to startup ecosystems other than major hubs such as Egypt, Kenya, Nigeria, Pakistan, Senegal and South Africa.
The platform contributes to IFC’s Startup Catalyst Program, which is also part of investments and efforts to tap technology ecosystems in Africa, the Middle East, Central Asia and Pakistan. In the first program, IFC made investments in Twiga Foods, a Kenyan food technology distribution platform; TradeDepot, an e-commerce startup connecting international brands with African retailers; and Toters, a leading on-demand delivery platform in Lebanon and Iraq.