IFC partners in US$5mn investment to boost African startup ecosystem

To bolster the startup ecosystem in Africa, IFC today announced a $5 million equity investment in P1 Ventures, a pan-African venture capital fund focused on pre-seed and seed stage investments in fintech, health, e-commerce marketplaces, and software.

Early-stage technology investment in Africa has been mostly concentrated in Nigeria, Egypt, South Africa, and Kenya, known as "the Big Four". While having an active presence in Lagos, Cairo, and Nairobi, P1 Ventures is committed to having half of its portfolio companies in underserved markets with strong talent pools in Francophone Africa, as well as low-income countries supported by the World Bank Group's International Development Association.

"IFC and P1 Ventures share a commitment to help ambitious African startup founders succeed in nascent venture capital ecosystems and expand regionally and even globally," said P1 Ventures Co-Founder and General Partner Mikael Hajjar. "We look forward to tapping into IFC's global network of clients and partners, as well as its understanding of local markets and regulations, to identify unique opportunities across the continent and help entrepreneurs become global winners."

IFC's role as the first public institutional investor in the fund is expected to help P1 Ventures attract additional capital to reach its fundraising target. The fund's first investment in early-stage startups will range from $500,000 to $1.5 million per company. It will also offer operational support to its portfolio companies, including helping them recruit experienced talent, forge commercial partnerships, and facilitate acquisitions and business expansion into new markets.

"IFC's investment allocation to P1 Ventures will make it easier for early-stage tech entrepreneurs to access growth capital, expand their operations, and attract follow-on funding," said Olivier Buyoya, IFC's Regional Director for West Africa. "By supporting market-disrupting digital business models, our investment aims to increase the competitiveness and efficiency of traditional markets in key sectors to boost inclusive economic growth across the continent. More importantly, our work will help strengthen venture capital ecosystems in Africa, especially in Francophone Africa markets underserved by global venture capital."

The investment is supported by IFC's Startup Catalyst (ISC) program, a platform designed to invest in incubators, accelerators and seed funds supporting innovative early-stage startups in emerging markets through mentoring, networking, and funding. To date, IFC Startup Catalyst has supported 21 accelerators and seed funds that have invested in more than 1,180 startups in 24 emerging markets.

ISC's support for high-risk markets, which have seen an increased pipeline of startups, is part of IFC's effort to develop digital economies and help startups access capital and global and local networks. In 2022, IFC launched a venture capital platform to invest $225 million in innovative tech businesses in Africa, Middle East, Central Asia, and Pakistan. ISC's focus on earliest-stage companies helps build a pipeline for the platform.