By contributing $3 million to Ibtikar Fund II, the newly established fund raised by Ibtikar, the well-known institutional-quality fund manager in the area, the European Bank for Reconstruction and Development (EBRD) is bolstering the West Bank’s emerging venture-capital ecosystem. This is the first equity investment made by the EBRD in a West Bank venture capital fund.
With the option to also invest in specific businesses in neighboring nations with ties to the West Bank and Gaza, Ibtikar aims to create long-term capital appreciation through equity and equity-related investments in up to 25 early-stage Palestinian technology companies.
The fund doubled the size of its debut fund and closed with commitments totaling $25 million, surpassing its original goal of $15 million.
Despite facing severe financial constraints and major economic obstacles, micro and small businesses—which make up over 98% of local businesses and produce over 60% of the country’s GDP—are essential to the Palestinian economy. Through Ibtikar, local tech startups will have access to the tools they need to grow, penetrate new markets, and promote sustainable development. By encouraging female employment and young entrepreneurs, this will promote digitalization and job creation. It will also strengthen Gaza’s economic ties with the West Bank and other surrounding nations.
Anne Fossemalle, EBRD Director for Private Equity Funds investment, said: “We are excited to support the further establishment of the early-stage innovation ecosystem in the West Bank in partnership with Ibtikar. This is our first investment in a venture-capital fund in the West Bank, and we look forward to taking part in supporting local startups, particularly in these unprecedented times.”
Habib Hazzan, Managing Partner of Ibtikar, said: “We are excited to welcome the EBRD to Ibtikar Fund II, as we share a common vision for empowering Palestinian entrepreneurs. This collaboration will enhance our ability to fund innovative Palestinian startups that will become leaders in regional and global markets and prove that the startup ecosystem in the West Bank has matured and is attractive for top-tier, international investors.”
In May 2017, the EBRD began operations in the West Bank and Gaza, and to date, it has approved 27 transactions totalling $142 million.
