The International Finance Corporation (IFC), the private sector arm of the World Bank, is contemplating an equity investment of up to $6 million in Flat6Labs’ newly established Africa Seed Fund, which has a target size of $85 million. This investment is being processed under the IFC Startup Catalyst Program and includes a proposed allocation of $5 million from the IFC’s own resources, along with up to $1 million from the Women Entrepreneurs Finance Initiative (We-Fi), which the IFC implements to support women-led businesses.
The Africa Seed Fund, managed by Flat6Labs—an Egyptian accelerator and venture capital fund manager—will concentrate on pre-seed and seed-stage investments across North, West, and East Africa. This region has experienced a notable decline in fundraising volumes since 2022, making the fund’s mission even more critical. This partnership marks another chapter in the ongoing collaboration between the IFC and Flat6Labs, which has previously seen the IFC invest in three of Flat6Labs’ earlier funds.
Addressing the Financing Gap
The primary objective of the Africa Seed Fund is to bridge the financing gap that early-stage startups in sub-Saharan Africa often face. The IFC’s blended finance co-investment strategy, which includes a modest level of concessionality estimated at up to 0.17% of the total project cost, is designed to attract additional investors and stimulate the broader startup ecosystem. By providing essential capital to pre-seed and seed-stage startups, the fund aims to foster entrepreneurship, spur innovation, and enhance digital infrastructure. These efforts are expected to create jobs, promote trade, and improve financial inclusion across the region.
A significant focus of the fund is to increase support for women-owned and led startups, with ambitious industry-leading targets set to ensure gender equity in entrepreneurship. The fund has a target size of $85 million, with a hard cap of $100 million, and aims to allocate 49% of its invested capital to Egypt while also targeting other countries in North, West, and East Africa, including Nigeria, Ghana, Kenya, Morocco, and Senegal.
Flat6Labs’ Proven Track Record
Flat6Labs has established a strong presence in the region, having invested over $16 million in startups and facilitated the raising of more than $191 million in follow-on funding since its inception 12 years ago. The firm claims to have generated over 2,500 direct jobs and 80,000 indirect jobs through its previous funds in Egypt and Tunisia, showcasing its impact on the local economies.
The Africa Seed Fund is set to invest in more than 160 early-stage tech startups over the next five years, with individual investment amounts ranging from $150,000 to $500,000. The fund will focus on key sectors such as FinTech, HealthTech, EdTech, GreenTech, AgriTech, and ClimateTech. In addition to providing capital, the fund will offer comprehensive business support, mentorship, and logistical assistance to help startups thrive.
Program Structure and Goals
The program will operate two cohorts annually, each comprising 10 to 15 startups. Flat6Labs emphasizes a hybrid approach that combines virtual collaboration with on-the-ground engagement, ensuring that startups receive the support they need in a flexible manner.
Ramez El-Serafy, General Partner for the Africa Seed Fund, highlighted the “huge untapped potential” within Africa’s tech and innovation sector. Dina el-Shenoufy, also a General Partner, underscored the fund’s commitment to driving positive change and supporting experienced founders with larger ticket sizes to facilitate their growth.
The fund is a collaborative initiative that involves partnerships with the Egyptian Agricultural Innovation Project (AIP), the Scaling Digital Agricultural Innovations via Start-ups initiative (SAIS), and GIZ, representing the German government. Flat6Labs anticipates that the fund will generate over $700 million in revenue, support more than 1,200 founders (with a target of 20% female participation), and create over 14,000 new jobs, significantly contributing to the economic landscape of the region.
