International Finance Corporation (IFC), a member of the World Bank Group, is considering investing up to $2.5 million in the Turkey-based seed fund of early-stage venture capital firm 500 Startups, according to a disclosure.
500 Startups Istanbul Fund is raising up to €30 million ($35 million) for a second fund that will invest in early-stage technology companies in Turkey and the East Europe region.
IFC said $2 million will be processed through its IFC Startup Catalyst Program, a $30-million facility that invests in incubators, accelerators, seed funds, and similar structures, while $500,000 will be from the Women Entrepreneurship Finance Initiative (We-Fi).
500 Startups’s first fund focused on defensible technology companies from the region and backed 40 seed-stage companies targeting sizeable markets.
“An investment in 500 Istanbul presents an opportunity for IFC to address the existing early-stage funding gap that currently exists in Turkey and Southern & Eastern Europe,” IFC said.
The fund, which will be managed by Rina Onur Sirinoglu and Enis Hulli, aims to deploy 80 per cent of the capital in Turkey and 20 per cent in Southern and Eastern Europe markets.
The international lender said fundraising in these markets is limited compared to most other emerging markets and early-stage VC funds have higher risk perception amongst investors.
IFC added that the We-Fi co-investment will support the fund to catalyse investment into more women-owned / led businesses and accelerate the fund’s support to early-stage high-impact women-owned and managed startups.
500 Startups Istanbul has invested in more than 30 companies. Most recently, it backed the seed round of Finding, a growing tech company that provides data-driven digital menus.
It also invested in the Series A funding round of BillionToOne, a diagnostics company, and in the venture round of Kondukto, an application security testing orchestration platform.
The IFC Startup Catalyst Program, meanwhile, seeks to invest between $1 million and $2 million into target investees with demonstrable track records, reputable managers, and sustainable structures.
Its portfolio includes Flat6Labs, a regional startup accelerator program; Ibtikar Fund, a disruptive fund that invests in innovative Palestinian companies; NXTP Ventures, one of the pioneers in Latin America’s venture capital industry; Pi Ventures, an early stage venture fund based out of India; Sarmayacar, a Palestinian VC company; SeedPlus, and early-stage Singaporean fund; and SOSV, a tech-focus global VC firm.