New $51M World Bank fund to target Morocco

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Morocco has been missing a strong investment fund dedicated to startups, but this will change in autumn when the World Bank launches a 500 million Moroccan dirhams (US$51 million) fund called Innov Invest.

Innov Invest will be dedicated to seed stage companies (those less than five years-old) and innovating SMEs in Morocco. The fund will offer funding-for-equity to 100 companies and through smart debts to 300 project holders.

The World Bank wants to change funding in Morocco (Photo via Flickr user Pingnews)

This is a fund led by the Moroccan government and funded by the World Bank, said Hicham Serghini, managing director of Caisse Centrale de Garantie (CCG), the public financial organization that will manage the fund on the behalf of the Moroccan government.

“The goal is to create a continuum of funding,” Serghini told Wamda over the phone.

The fund was created to answer a need in venture capital. “The goal is that there is more and more players on that segment,” he said. “We will commission investment companies [to create] funds in which we will be main investors.”

The CCG will soon call for interest in order to select two companies that will create the public/private funds that the CCG will endow with 150 to 200 million dirhams each (US$ 15 to 20 million). The CCG could join other funds it will be a minority investor in.

A continuum of funding. (Image via la Caisse Centrale de Garantie)

‘Smart debts’

“Upstream, there are needs in pre-seed, that’s where we’ll put smart debts tools,” Seghini said.

The CCG will offer subsidies through incubators, associations and business angels, which could go as high as 100,000 dirhams to 200,000 dirhams (US$10,000-$20,000), or interest free loans that could go as high as 250,000 dirhams to 500,000 dirhams (US$25,000-$50,000).

The CCG will also give money after the VC phase through reimbursable advances and participative loans to startups who raised venture money as follow-on funding.

Complementary investment programs. (Image via la Caisse Centrale de Garantie)

The framework convention was signed late last week. The money should be approved in September by the World Bank’s board.  

In February, Wamda Research Lab mapped the startup ecosystem in Morocco for the World Bank and noted a dire need for funding.

Morocco had only one seed venture capital fund for startups, Maroc Numeric Fund (MNF) which invest in roughly a handful of companies a year, and organizations offering small loans such as Maroc Entrepreneur. Until  now, no incubation or acceleration programs offer funding.

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