The International Finance Corporation (IFC) has announced $10.5 million (Sh1.38 billion) investment to support early stage technology companies in Africa with main focus on Kenya, Nigeria, Senegal, Egypt and South Africa.
This amid concerns of the continent being among the least served regions by venture capital, receiving just two per cent of global venture deal volume in the third quarter of 2023.
IFC says the limited funding in the continent is as a result of a slowdown in global venture capital investment, as well as reduced attractiveness index in some potential countries.
The investment funding is by 4DX Ventures, a New York-based venture capital firm focused in supporting African startups, and will target companies across a broad set of sectors, including fintech, e-commerce, edtech, climate tech, and health tech.
Commenting on the funding, 4DX Ventures co-founder and general partner Walter Baddoo, said together with IFC, they share the commitment to supporting tech entrepreneurs with innovations that will help Africa leapfrog in critical areas.
"We look forward to partnering with IFC to help promising tech startups build transformative businesses and realise sustainable development impact on the continent," Baddoo said.
He reiterated that the new fund will invest in companies with tech solutions that can improve productivity, efficiency and competitiveness across the continent.
The firm's first two funds invested in companies such as Egypt-based e-commerce platform MaxAB, an IFC portfolio company; Ghana-based health tech firm mPharma; and Kenya-based B2B e-commerce platform Wasoko, formerly known as Sokowatch.
"By supporting the development of tech ecosystems in emerging markets, IFC's venture capital platform aims to improve access to key services, boost business competitiveness and promote job creation through digital transformation," said Mohamed Gouled, vice president of Industries at IFC.
"Our investment in venture funds such as 4DX Ventures will help African entrepreneurs access more financing and resources they need to scale tech innovations and bolster sustainable growth across the continent.”
In addition to providing capital, IFC will work with 4DX Ventures to implement their environmental and social management system.
