The 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.
IFC, a member of the World Bank, will make equity and “equity-like” investments in tech startups “to grow them into scalable ventures that can attract mainstream equity and debt financing.”
The institution said in a statement that it will use the sector-agnostic platform to work with other World Bank members to champion regulatory reform, sector analysis and other changes that can enhance the venture capital ecosystem in these regions.
IFC will also bring in additional capital from other development organizations and the private sector. It has so far received an additional $50 million in support from the International Development Association’s Private Sector Window’s Blended Finance Facility, which de-risks investments in low-income countries.
“Support for entrepreneurship and digital transformation is essential for economic growth, job creation and resilience,” IFC Managing Director Makhtar Diop said in a statement shared with TechCrunch.
“IFC’s venture capital platform will help tech companies and entrepreneurs expand in times of capital scarcity, create scalable investment opportunities and support countries’ efforts to build transformative tech ecosystems. We want to help develop indigenous innovative solutions that are not only relevant for emerging countries but can also be exported to the rest of the world,” he said.
IFC’s focus areas continue to receive a small percentage of global capital funding, and the organization hopes to help close this gap, made worse by the funding slowdown caused by macroeconomic headwinds.
The new platform adds to IFC’s startup catalyst program, which is part of its investments and efforts to tap tech ecosystems in Africa, the Middle East, Central Asia and Pakistan.
The organization has so far invested directly in Twiga Foods, a Kenyan technology food distribution platform; TradeDepot, a B2B e-commerce startup connecting brands with retailers; and Toters, an on-demand delivery platform in Lebanon and Iraq. It plans to use the platform to invest in areas outside its major hubs such as Egypt, Kenya, Nigeria, Pakistan, Senegal and South Africa.