Exclusive: IFC to invest $15m in HK-based Arbor Ventures’ new fund

Arbor Ventures gets IFC funding
Commercial towers at the financial Central district are seen behind a lion decoration in Hong Kong, China January 5, 2016. REUTERS/Bobby Yip

International Finance Corporation (IFC) will invest up to $15 million in Hong Kong-based venture capital firm Arbor Ventures $220-million new fund Arbor Venture Fund II.

IFC, an associate of The World Bank Group, is considering an equity investment as a limited partner. A significant portion of its investment will be used to support Arbor’s investments focused on Asia, IFC disclosed on Wednesday.

A privately-held venture capital firm founded in 2013 by Melissa Guzy and Wei Hopeman, Arbor Ventures invests in early stage fintech companies that operate at the intersection of financial services, big data and digital commerce.

Arbor’s second fund is on the road to raise $220 million, according to a filing at the US Securities and Exchange Commission on Tuesday.

Arbor is seeking limited partner investments for its new fund, Arbor Fund II. The firm has so far received funding for its prior funds from institutional investors, financial institutions, and family offices. The firm is known to identify companies that are either headquartered in Asia or derive a substantial part of their growth from the region.

The current investment in an Asia-focused venture capital fund by IFC follows a series of such funding by it. Earlier this year, pi Ventures, an early-stage venture capital firm that recently marked the first close of its maiden fund, received $3 million from IFC. Similarly, IFC is also investing $40 million worth of senior debt to Tata Cleantech Capital Ltd (TCCL).

Last year, IFC announced its plans to double its portfolio of venture capital investments to $1 billion over the next two years to support technology entrepreneurs and accelerate innovation in emerging markets.

In fact, IFC has already developed direct equity investments in startups as well as made investments as a limited partner in VC funds. Companies in IFC’s VC portfolio include Andela, a Nigerian education company; Portea, an Indian healthcare company; Planet Labs, a satellite imagery company; Hepsiburada, a Turkish consumer internet company; and Souq.com, a Middle Eastern consumer internet company.

Moreover, IFC is one of the biggest investors in India and backs about two-thirds of the active growth funds investing in unlisted small and mid-cap companies.

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