Ibtikar Fund (“Innovation” in Arabic), a Palestinian early stage venture capital, increases its capital by USD 2.5 million, to USD 10.45 million. It welcomes the International Finance Corporation, the Dutch Good Growth Fund, and Reach Holding as Limited Partners. What does this massive amount of money mean to Palestinians? By this, more Palestinian startups will be invested in, over the next three years and it shows that institutional investors are now starting to see the opportunity of investing in them!
When Ibtikar was first launched in May 2016, it made 14 investments in Palestinian startups. It had, by that time, a growing portfolio that has already been attractive to regional and global investors.
Now, Ibtikar’s announcement of capital increase, in Ramallah, Palestine ( July 5, 2017) marks the first investment in Palestinian venture capital by the International Finance Corporation (IFC) and the Dutch Good Growth Fund (DGGF), whom are active worldwide investors.
This is the first venture capital investment in MENA for DGGF and the second for the IFC under its new Startup Catalyst program!
Notably, Ibtikar Fund invests in innovative Palestinian companies. Its investments start at ‘seed level’ through local accelerators, continuing to post-acceleration stages. These investments may also include series A investments in its portfolio companies. Through this investment strategy, Ibtikar aims to close a critical funding gap between acceleration and VC and other later-stage investors.
For Ibtikar, this deal has proven their influence, as it shows that their are worldwide investors who trust in their management of this fund.
The IFC Regional Director in the Middle East and North Africa, Mouayed Makhlouf, said:
“We believe Ibtikar can play a pivotal role in strengthening the area’s entrepreneurial ecosystem, creating jobs, and attracting more investment”.
In FY16, IFC delivered a record $19 billion in long-term financing for developing countries. This, in a sense, leveraged the power of the private sector to help end poverty and boost shared prosperity.
The second investor is The Dutch Good Growth Fund. This fund is for financing local SMEs which is a “fund of fund” investment initiative from the Dutch Ministry of Foreign Affairs. One of its aims is to help entrepreneurs who have outgrown micro-finance but do not have access to conventional capital markets yet.
Accordingly, The Seed Capital and Business Development (SCBD) program is established to further increase and extend the impact of the DGGF by providing Technical Assistance, Seed Capital and Business Support Services to intermediary funds and local SMEs. SCBD looks to spur innovation in SME finance and move the finance frontier to underserved SME markets by using a range of instruments.
In regards to that, the managing General Partner of Ibtikar, Habib Hazzan said:
“These new investments are a validation of our work over the last two years, and a vote of confidence in our management. We are glad that the IFC, DGGF and Reach Holding agree with our current investors in the potential of Palestinian startups and welcome them to our fund.”
The last investor is Reach Holding Company. It is a USD 30M private shareholding company which was established by the Palestinian businessman, Mr. Malik Melhem. Reach Holding works and aims to improve the Palestinian economy, contribute to its development, and deepen the Palestinian’s pertinence and belonging to their land.
The main goal is to maximize return for the investors by helping high-potential Palestinian companies answer regional and global needs.