Sister organization of the World Bank, The International Finance Corporation (IFC), will be investing $2.5 million in a venture capital firm for tech startups, Sarmayacar , this will “boost entrepreneurship and spur economic growth” in Pakistan, a press statement said.
According to the press release, $2m of the total IFC fund are equity commitments from Startup Catalyst, the body’s global programme to support seed funds and accelerators, that include investments, mentorship, connections etc, in emerging markets.
“The early stage of local venture capital ecosystems is often the most crucial building block for sustaining healthy entrepreneurship and innovation, which helps to drive economic growth and create quality jobs,” Nadeem Siddiqui, IFC’s Senior Manager for Pakistan and Afghanistan was quoted as saying.
“Our aim is to support these entrepreneurs by helping to bridge issues around insufficient seed capital and strengthen the entrepreneurial ecosystem in Pakistan.”
The remaining $500,000 is from the Women Entrepreneurship Finance Initiative (We-Fi), that provides support to women entrepreneurs in developing countries by building their capacity, providing them access to financial services as well as domestic and global markets.
The investment by IFC will boost the “country’s entrepreneurship ecosystem” by increasing market competition and will also encourage entrepreneurs to expand into new markets, the press release said.
Sarmayacar’s founder Rabeel Warraich highly praised the step and said: “This marks the first such investment from the World Bank Group in Pakistan and will enable us to back more startups in the country, while also providing access to a global network, new markets and domain expertise to our portfolio companies.”
“Pakistan offers a unique opportunity with its improving stability; large, young population; rising middle class; fast-growing internet and smartphone penetration; and a dearth of venture capital in the ecosystem. Our goal at Sarmayacar is to provide value-add early-stage funding to entrepreneurs who are building scalable, market-transforming consumer and enterprise technology businesses in Pakistan,” he was quoted as saying.
Sarmayacar is a Netherlands-based venture capital firm that invests in budding tech-based startups with the aim to help build “scalable, market-transforming enterprise and consumer technology businesses in Pakistan”, according to its website. The company’s clients include local startups like Bykea, Dot & Line and Patari, among others.