The International Finance Corporation (IFC) today launched a $225 million platform to support early-stage startups in Africa, the Middle East, Central Asia and Pakistan.
The IFC, a member of the World Bank, through the platform will make equity and “equity-like” investments in technology startups to “turn them into scalable companies that can attract equity financing and conventional debt.”
The institution said in a statement that it will also use the industry-independent platform to work closely with other World Bank members to promote regulatory reforms, sector analysis and other changes that can grow VC ecosystems in these regions.
IFC will also seek more capital from other development institutions and the private sector. So far it has received additional support of $50 million from the International Development Association’s Private Sector Window Blending Facility, which reduces the risks of investing in low-income countries.
“Supporting entrepreneurship and digital transformation is essential for economic growth, job creation, and resilience,” Makhtar Diop, IFC’s managing director, said in a statement shared with TechCrunch.
“IFC’s venture capital platform will help technology companies and entrepreneurs scale during a time of capital scarcity, creating scalable investment opportunities and supporting countries’ efforts to build transformative technology ecosystems. We want to help develop local innovative solutions that are not only relevant to emerging countries, but can also be exported to the rest of the world,” he said.
IFC’s regions of interest continue to receive a small percentage of global equity financing, and IFC hopes to help close this gap. This is especially in the wake of a slowdown in funding amid macroeconomic headwinds. IFC hopes to expand the platform to other startup ecosystems beyond major hubs such as Egypt, Kenya, Nigeria, Pakistan, Senegal, and South Africa.
The platform joins IFC’s Startup Catalyst Program, which is also part of investments and efforts to leverage technology ecosystems in Africa, the Middle East, Central Asia and Pakistan. In its initial program, IFC has made investments in Twiga Foods, a Kenyan food distribution technology platform; TradeDepot, a B2B e-commerce startup connecting brands with retailers; and Toters, an on-demand delivery platform in Lebanon and Iraq.