RAMALLAH, Tuesday, January 25, 2022 (WAFA) – The International Finance Corporation (IFC), the World Bank Group's private sector arm, and the Women Entrepreneurs Finance Initiative (We-Fi), a financial intermediary fund hosted by the World Bank, provided an additional $3 million to support early-stage Palestinian entrepreneurs, according to a press release.
IFC is investing in Ibtikar Fund II, a disruptive venture capital fund that invests in innovative Palestinian startups, to support early-stage entrepreneurs, spur innovation, and drive economic growth in the West Bank and Gaza.
IFC is providing $2.5 million in equity to Ibtikar Fund II, Ibtikar's second venture capital fund. We-Fi is investing an additional $500,000 to help Ibtikar better reach and support more women entrepreneurs, said the press release.
Ibtikar provides local startups with critical support. Many founders in the West Bank and Gaza lack the financing and mentorship necessary to scale their businesses. About 90 percent of microentrepreneurs, who are mostly active in trade and services, lack access to financial services, according to an IFC study.
"We are proud to partner with IFC once again in launching this second fund," said Habib Hazzan, Managing Partner at Ibtikar. "Their increased investment is a testament to the impact of our work and that of our entrepreneurs. We look forward to working with IFC and We-Fi to identify and back the best Palestinian entrepreneurs."
The funding from We-Fi will help Ibtikar implement a gender action plan, including targets to ensure continued support to women-led startups. These efforts are expected to create a more inclusive venture capital ecosystem across the region. Market research shows that women-led startups at post-acceleration stages receive 2.2 times less funding than male-led startups.
"Women entrepreneurs are disproportionately disadvantaged compared to their male counterparts in accessing seed capital," said Hanh Nam Nguyen, IFC's We-Fi Program Manager. "The We-Fi program is committed to supporting women startups through funds, like Ibtikar, and helping to leverage more private sector financing for early-stage companies."
"Venture capital is critical to helping startups in West Bank and Gaza reach scale and compete both regionally and internationally," said Youssef Habesh, IFC's resident representative in the West Bank and Gaza. "That in turn could have a powerful impact on the local economy. Technology companies have the potential to become engines of job creation, which is key in a market where unemployment, especially for women and youth, is a challenge."
Ibtikar Fund II has a target size of $30 million and will focus on investing in pre-seed and seed-stage technology startups established by founders primarily in the West Bank and Gaza or with a Palestinian nexus.
This marks the second time IFC has invested in an Ibtikar fund. IFC previously invested $1 million in Ibtikar's first fund, which was launched in 2016 to develop, support, and grow the underserved entrepreneurial ecosystem in the West Bank and Gaza. So far, the inaugural approximately $10.4 million fund has invested in 26 companies and indirectly supported the creation of over 250 jobs. IFC's continued support of Ibtikar is part of its Startup Catalyst initiative, which backs incubators, accelerators and seed funds in emerging markets to catalyze the venture capital ecosystem and spur entrepreneurial activity.