USD 6 M on the Line as IFC Weighs Investment in Flat6Labs Africa to Support Early-Stage Startups

The International Finance Corporation (IFC), part of the World Bank Group, is considering a USD 6 M equity investment in Flat6Labs Africa, a MENA-based seed and early-stage venture capital fund.

This investment, channelled through the IFC Startup Catalyst Program (ISC), is expected to bolster Flat6Labs’ Africa Seed Fund which focuses on nurturing pre-seed and seed-stage tech startups across North, West, and East Africa. The proposed investment could mark IFC’s fourth investment in Flat6Labs’ managed funds.

The fund will be managed by Flat6Labs For Financial Consulting S.A.E. leveraging their extensive experience in supporting early-stage companies. 

A crucial element of this initiative is the support provided by the Women Entrepreneurs Finance Initiative (WeFi) through its Blended Finance Facility (BFF). This partnership highlights a strong emphasis on gender-lens investing, ensuring that women entrepreneurs in the region have equitable access to the resources and capital they need to thrive.

The Africa Seed Fund, with a target fund size of USD 85 M and a hard cap of USD 100 M, aims to provide crucial early-stage funding and support to promising startups.

Launched in 2023, the Fund primarily focuses on North, West, and East Africa, with a target allocation of 49% of invested capital to Egypt. Over the next five years, it aims to invest in over 160 pre-seed to pre-Series A tech startups. Focus sectors include HealthTech, FinTech, EdTech, GreenTech, AgriTech, ClimateTech, and others contributing to digital inclusion and addressing social and environmental challenges.

Investment tickets will range from USD 150 K to USD 500 K through the Flat6Labs’ Africa Seed Program, with additional seed funding available for experienced founders outside the program. The fund will also participate in follow-on investment rounds.

This significant capital injection is projected to create over 14,000 jobs, support more than 1,200 founders (with a target of 20% female participation), and generate over USD 700 M in revenue.

Beyond funding, Flat6Labs Africa offers comprehensive support, including mentorship, access to industry experts and investors, business development training, and other resources. This holistic approach recognizes the multifaceted needs of early-stage startups.

The IFC’s potential investment is timely, aiming to address the critical need for early-stage funding in Africa’s rapidly growing tech ecosystem. Flat6Labs aims to fill a vital market gap, providing not only capital but also the guidance, connections, and skills necessary for startups to scale.

This proposed investment aligns with the IFC’s broader strategy of promoting private sector development and innovation in emerging markets. By supporting early-stage startups, the IFC contributes to job creation, economic growth, and a thriving entrepreneurial ecosystem. The WeFi partnership further strengthens the project’s potential to empower women entrepreneurs and advance gender equality.

With the backing of IFC and We-Fi, Flat6Labs Africa is well-positioned to catalyze the growth of innovative businesses, create employment, and drive economic development across North, West, and East Africa. The focus on gender and expansion into fragile and conflict-affected states amplifies the potential for positive social impact, making this a significant initiative in the African startup landscape.