The International Finance Corporation (IFC) has pledged a $15 million investment in Algebra Ventures’ $90 million second fund.
IFC’s $15 million investment in Algebra Fund II will help support the growth of roughly 20 technology startups, primarily in Egypt but also in Africa more broadly. The fund, which has a target size of $90 million, will have a special focus on women-led businesses and those serving rural communities.
Access to financial capital helps drive economic and job growth – and entrepreneurship is a key contributor. Yet, the amount of venture capital available in Egypt is just a quarter of the emerging market average, though it has grown more than 10-fold since 2016.
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“We are delighted to see IFC return as a limited partner in our second fund, having invested in our first fund five years ago as well as directly into our portfolio. IFC has been one of our strongest partners since day one and believed in our vision when there was no venture capital to speak of in Egypt. We look forward to continuing to strengthen our partnership going forward,” said Tarek Assaad, Managing Partner at Algebra Ventures.
“With its young, tech-savvy population and large market, Egypt’s entrepreneurs are perfectly poised to drive change in the country’s economy – with the right support,” said Yasmine El-Hini, IFC Egypt Country Officer and Acting Country Manager for Egypt and Libya. “With this investment, we are helping to push the country’s startup scene forward and encourage innovation.”
The investment is part of IFC’s strategy to support Africa’s blossoming start-up and entrepreneurship ecosystem. Today’s announcement also marks IFC’s second investment in Algebra Ventures.
In 2016, IFC invested $10 million to co-anchor Algebra’s inaugural $54 million fund, which also attracted investments from Cisco Investments, the Egyptian American Enterprise Fund, and the European Bank for Reconstruction and Development. Algebra Fund I was the first Egypt-dedicated VC fund and has supported 21 tech startups and created over 3,500 direct and 28,000 indirect jobs.
Earlier this year, IFC directly invested $5 million in Brimore, an Algebra Ventures portfolio company and social commerce company, and $20 million in the Ezdehar Fund to help smaller businesses access finance.
As of June 2021, IFC’s global Venture Capital investments reached $1.6 billion in over 100 companies and venture capital funds, supporting nearly 1,700 companies and helping to drive innovation and growth.
Egypt has set a tech growth trajectory that is rapidly rising to rival leading nations like Nigeria and South Africa in the African tech ecosystem.
Minister of Information and Communications technology Amr Talaat said in February that Egypt’s information and communications technology (ICT) sector is the fastest growing sector in the Egyptian economy over the past two years, as its contribution to the country’s GDP rose from 3.2 percent in FY 2019/2020 to five percent in the current FY 2021/22.
Since January 2015, more than 791 million dollars has been raised by more than 320 tech startups across over 4450 individual rounds. The North African country has seen yearly increase in its start space, adding 114 tech startups to its ecosystem from a paltry 10 in 2015. Annual funding secured by the companies rose significantly from 8.6 million dollars to 156 million dollars in 2020.