Iraqi Islamic Bank partners with MSA Novo to back startups in Iraq
- Iraq Islamic Bank (IIB) has partnered with investment company MSA Novo, to launch a tech fund to invest in Iraqi startups and lead the digital transformation in the country.
- The investment vehicle aims to fund, build, and mentor the next generation of Iraqi business leaders, as well as lay the foundations for the country's long-term economic and social transformation.
- MSA Novo is a China-based investment company, part of MSA Capital that has an active presence in the Mena region. It has invested in Kitopi, Tabby, Swvl, Sary, Zid, and Homzmart.
As the global drive toward digitisation accelerates in the wake of Covid-19, implementing online solutions is even more critical to meet adapted consumer behaviour and market conditions. Moreover, particularly in emerging technology markets, the integration of paradigm-shifting technologies allows consumers, corporates, and governments to leap rungs on the evolutionary ladder.
Novel technologies allow for virtual infrastructure where the physical lags, allowing the provision of critical services not possible in the offline realm. Nowhere is this demand more critical than Iraq, a market with massive untapped potential, hindered by a historical lack of cohesive offline infrastructure. Iraq boasts a young, technology-savvy, well-educated consumer base with relatively high purchasing power. Yet these individuals struggle against the challenges imposed by outdated or broken infrastructure and fragmented supply chains.
Into this void steps Iraq Islamic Bank ("IIB") and MSA Novo ("MSA"), with YAG Capital ("YAG") as senior advisor for this partnership. Now is the time to lay the digital rails and platforms on which all future commerce, financial services, government administration, and healthcare delivery will reside.
Under these conditions, it is paramount to not just invest in startups but directly engage in building companies which merge the technical capabilities and global best practices aggregated by MSA with the local market knowledge and execution capabilities of IIB. This vehicle is historically the first endeavour of this nature established for Iraq and the largest pool of capital ever aggregated for investment into the technology ecosystem in the country. This initiative aims to not only create value for its investors and the shareholders of IIB but will also kickstart the innovation flywheel in the market. By funding, building, and mentoring the next generation of Iraqi business leaders, this endeavour seeks to lay the foundations for the country's long-term economic and social success.
The fund is already among the active investors in Iraq, having co-led the most extensive funding round in Iraqi tech start-up history with the super app, Baly. Targeted investment sectors will be core logistics and payments infrastructure layers, consumer technology platforms and enterprise enablers.
Iraqi Islamic Bank Chairman Ahmed W Ahmed said: "We are delighted to work with our partners to support entrepreneurship in Iraq. By collaborating on this initiative to support local businesses, we will strengthen the economy, generate employment, stimulate innovation and add value to the SME sector, the backbone of the local economy. We are well placed to comprehend the challenges faced by local entrepreneurs in the volatile market, and we will guide, support and create added value to ensure their ventures are fruitful."
Commenting on the announcement, MSA Novo Managing Partner Ben Harburg said: “We are excited to partner with IIB as we seek to utilize our global experience, lens, and technology to identify and build the leading technology companies to address the highly attractive Iraqi market.”
YAG Capital Chairman Yazen Abu Gulal said: "This partnership will have many tangible advantages for the Iraqi digital economy, including increased efficiency, better productivity, reduced costs, improved communication and transparency.
We believe in empowering, supporting and championing young entrepreneurs in Iraq to drive innovation and lead the digital revolution for the local economy."