- The European Bank for Reconstruction and Development (EBRD) has invested $3 million in Ibtikar Fund II to support early-stage Palestinian tech companies.
- The fund successfully closed with total commitments of $25 million, surpassing its initial target of $15 million and doubling the size of its first fund.
- Micro and small businesses, which represent over 98% of local enterprises and contribute more than 60% of GDP in Palestine, will benefit from the resources provided by Ibtikar to scale operations and foster sustainable development.
- The partnership between EBRD and Ibtikar aims to strengthen the early-stage innovation ecosystem in the West Bank, enhancing economic links with Gaza and surrounding regions.
The European Bank for Reconstruction and Development (EBRD) has committed $3 million to Ibtikar Fund II, marking a significant milestone in supporting the development of early-stage Palestinian tech companies.
This strategic investment will enable Ibtikar, a well-known institutional-quality fund manager in the region, to promote the growth of up to 25 early-stage technology startups in Palestine. The fund closed with an impressive $25 million in total commitments, surpassing its initial target of $15 million, effectively doubling the size of its maiden fund.
Promoting Digitalisation and Job Creation
The primary aim of EBRD’s investment in Ibtikar Fund II is to foster digitalisation and create jobs in the Palestinian economy. By backing tech companies, this initiative hopes to not only nurture innovation but also support local entrepreneurs who are key to driving economic growth.
The investment will empower Palestinian startups to scale their operations, expand into new markets, and increase employment opportunities, particularly for young people and women.
This initiative marks EBRD’s first equity investment in a venture capital fund in the West Bank. The decision to support Ibtikar is part of the bank’s broader strategy to strengthen the nascent venture-capital ecosystem in the West Bank and Gaza.
In doing so, EBRD aims to ensure that local startups have access to the capital needed to grow and succeed, thereby contributing to the sustainable development of the region.
Ibtikar Fund II: Empowering Palestinian Entrepreneurs
Ibtikar Fund II seeks to generate long-term capital appreciation by making equity and equity-related investments in Palestinian tech startups. Additionally, the fund has the flexibility to invest in selected companies in neighboring countries, provided these companies maintain a connection to the West Bank and Gaza.
This approach will not only strengthen the local startup ecosystem but also foster economic collaboration between Palestine and its neighboring regions.
The importance of micro and small businesses in Palestine cannot be overstated. These businesses make up over 98 percent of local enterprises and contribute more than 60 percent of the country’s gross domestic product (GDP).
Despite their significance, many face substantial economic challenges, primarily due to capital shortages. Ibtikar’s investment strategy will address this issue by providing essential resources to local startups, helping them grow their operations and access new opportunities. In turn, this will help stimulate digitalisation, job creation, and economic ties between the West Bank, Gaza, and neighboring countries.
Strong Institutional Backing and Vision
Anne Fossemalle, the EBRD’s Director for Private Equity Funds investment, emphasized the bank’s enthusiasm for supporting the West Bank’s early-stage innovation ecosystem.
She highlighted that this is EBRD’s first investment in a venture capital fund in the region and expressed confidence in the potential of local startups to thrive, especially in the current challenging environment. Fossemalle underscored the importance of fostering innovation and supporting the growth of Palestinian tech companies, which play a critical role in the region’s economic development.
Similarly, Habib Hazzan, Managing Partner of Ibtikar, expressed his excitement over EBRD’s involvement in Ibtikar Fund II. He noted that the partnership reflects a shared vision of empowering Palestinian entrepreneurs to build successful businesses capable of competing on regional and global stages.
Hazzan pointed out that this collaboration will further strengthen the startup ecosystem in the West Bank and attract international investors who recognize the potential for growth and innovation in Palestine.
EBRD’s Commitment to the West Bank and Gaza
Since initiating its activities in the West Bank and Gaza in May 2017, EBRD has been actively supporting the region’s economic development. To date, the bank has approved 27 transactions, amounting to a total of $142 million. These investments have focused on a wide range of sectors, including infrastructure, renewable energy, and, more recently, the burgeoning tech industry.
By committing $3 million to Ibtikar Fund II, EBRD is reaffirming its commitment to promoting innovation, entrepreneurship, and job creation in Palestine. This investment aligns with EBRD’s broader strategy of supporting emerging markets and providing critical funding to early-stage companies that have the potential to drive sustainable economic growth.
A Promising Future for Palestinian Startups
The collaboration between EBRD and Ibtikar Fund II signals a bright future for Palestinian tech startups. By providing crucial capital and resources, this partnership will help local entrepreneurs overcome economic challenges, scale their businesses, and reach new markets.
Additionally, the focus on digitalisation and job creation will have a long-lasting impact on the region, particularly in empowering young people and women, who are often underrepresented in the tech sector.
As the startup ecosystem in the West Bank continues to mature, Ibtikar Fund II, with the backing of EBRD, is well-positioned to lead the charge in fostering innovation and creating opportunities for Palestinian entrepreneurs.
This investment is a testament to the growing recognition of Palestine’s potential as a hub for technology and entrepreneurship, attracting top-tier international investors who believe in the region’s ability to compete on the global stage.
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Last Updated on September 26, 2024 by Safiya K
