The International Finance Corporation (IFC) announced an investment in the second fund from venture capital firm Algebra Ventures on Sunday to support tech start-ups with access to finance and drive innovation and job creation primarily in Egypt.
The IFC’s $15m investment in Algebra Fund II will help support the growth of roughly 20 tech start-ups primarily in Egypt but also in Africa more broadly. The fund, which has a target size of $90m, 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. However, 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.
“We are delighted to see the 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. The 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 Al-Hini — IFC Egypt’s Country Officer and Acting Country Manager for Egypt and Libya.
“With this investment, we are helping to push the country’s start-up scene forward and encourage innovation.”
The investment is part of the IFC’s strategy to support Africa’s blossoming start-up and entrepreneurship ecosystem.
In 2016, the IFC invested $10m to co-anchor Algebra Venture’s inaugural $54m 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 start-ups and created over 3,500 direct and 28,000 indirect jobs.
Earlier this year, the IFC directly invested $5m in Brimore — an Algebra Ventures portfolio company and social commerce business — and $20m in the Ezdehar Fund to help smaller businesses access finance.
As of June 2021, the IFC’s global VC investments reached $1.6bn in over 100 companies and VC funds, supporting nearly 1,700 companies and helping to drive innovation and growth.