The IFC launches a $225M platform to support early-stage startups.
To help fund early-stage businesses in developing countries including those in Africa, the Middle East, Central Asia, and Pakistan, the International Finance Corporation (IFC) has established a venture capital platform with a $225 million budget.
To “develop them into scalable companies that can attract mainstream equity and debt funding,” the World Bank’s private investment arm, the IFC, will invest in tech firms in exchange for stock or equity-like securities.
The bank stated in a statement that it would utilise the sector-neutral platform to advocate with other World Bank members for regulatory reforms, sector assessments, and other improvements that will expand the venture capital ecosystems in those areas.
The IFC will also lobby for further funding from private companies and international organisations committed to development. A further $50 million in support has come via the Private Sector Window of the International Development Association, which lowers the financial risk of investing in the middle- and low-income nations.
In a statement sent to TechCrunch, IFC managing director Makhtar Diop stated, “Support for entrepreneurship and digital transformation is crucial to economic development, job creation, and resilience.”
By facilitating the development of scalable investment possibilities and supporting nations in their attempts to create transformational tech ecosystems, IFC’s Venture Capital Platform will aid the growth of tech businesses and entrepreneurs during times of capital scarcity. When he remarked, “We want to help produce domestic creative solutions that are important to rising nations and can also be sold to the rest of the globe,” he meant it.
Despite the reduction in financing caused by macroeconomic challenges, the IFC’s target areas continue to receive a tiny fraction of the global capital.
This new platform complements IFC’s existing Startup Catalyst Program, which is part of the organization’s investments and initiatives to leverage technology ecosystems in developing countries throughout Africa, the Middle East, Central Asia, and Pakistan.
Twiga Foods, a Kenyan digital food distribution network; TradeDepot, a B2B e-commerce business linking brands with retailers; and Toters, an on-demand delivery platform in Lebanon and Iraq; are just a few of the companies in which the organisation has made direct investments to far. It hopes to utilise the platform to expand its investments outside of traditional economic centres such as Egypt, Kenya, Nigeria, Pakistan, Senegal, and South Africa.