The International Finance Corporation (IFC) announced today that it has launched a $225 million platform targeted at backing early-stage startups in Africa, Central Asia, Pakistan, and the Middle East.
Through the platform, the IFC which is a member of the World Bank will make equity and other related investments in tech startups. The aim is to “grow them into scalable ventures that can attract mainstream equity and debt financing.” In a statement issued by the IFC, it said that the platform will also be used to partner with other members of the World Bank with the aim of championing regulatory reforms, sector analyses, and necessary changes that can improve the venture capital ecosystems of these regions. It will also rally for more capital from other development institutions and the private sector.
So far, the IFC has received an additional $50 million backing 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 transformation is essential to economic growth, job creation, and resilience. IFC’s Venture Capital Platform will help tech companies and entrepreneurs to expand during a time of capital shortage, creating scalable investment opportunities and backing countries’ efforts to build transformative tech ecosystems. We want to help develop homegrown innovative solutions that are not only relevant to emerging countries but can also be exported to the rest of the world,” IFC’s managing director Makhtar Diop said in a statement.
The IFC has chosen to focus on these regions because they continue to receive a small percentage of global capital funding. It, therefore, wants to help bridge this gap that the decline in funding as a result of macroeconomic challenges created.
The new platform is the latest addition to its Startup Catalysts Program, which is also part of its investments and efforts to tap into tech ecosystems in Africa, Central Asia, Pakistan, and the Middle East.
The IFC, with the newly-launched platform, wants to invest in underserved regions beyond major regions like Nigeria, Egypt, Kenya, and South Africa.