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 technology startups to “turn them into scalable investments that can attract mainstream equity and debt financing.”
The institution said in a statement that it will use the sector-agnostic platform to work closely with other World Bank members to support regulatory reforms, sector analytics and other changes that can grow venture capital ecosystems in these regions.
IFC will also raise capital from other development institutions and the private sector. It has so far received $50 million in additional support from a blended finance facility from the International Development Association’s private sector window that leverages investment in low-income countries.
“Supporting entrepreneurship and digital transformation is essential for economic growth, job creation and resilience,” said IFC CEO Mukhtar Diop in a statement shared with TechCrunch.
IFC’s venture capital platform helps technology companies and entrepreneurs create scalable investment opportunities in times of capital scarcity and supports countries’ efforts to build transformative technology ecosystems. We want to help develop domestic innovative solutions that are not only relevant to emerging countries, but can also be exported to other parts of the world.
IFC’s focus areas continue to receive a small percentage of global capital funding, and the institution hopes to help close a gap that has been worsened by sluggish funding from macroeconomic headwinds.
The new platform adds to IFC’s Startup Catalyst program, which is part of its investment and efforts to tap technology ecosystems in Africa, the Middle East, Central Asia and Pakistan.
The institution has so far made a direct investment in Twiga Foods, a food distribution platform in Kenya. TradeDepot, a B2B e-commerce startup that connects brands with retailers. and Toters, an on-demand delivery platform in Lebanon and Iraq. The company plans to use this platform to invest in areas beyond the main centers such as Egypt, Kenya, Nigeria, Pakistan, Senegal and South Africa.