The International Finance Corporation (IFC), a member of the World Bank Group, is investing $2.5 million in Pakistan-focused venture capital firm Sarmayacar. This marks IFC’s foray into Pakistan’s venture ecosystem.
According to a statement, IFC’s investment will comprise $2 million in equity commitments from Startup Catalyst, an IFC programme that backs accelerators and seed funds in emerging markets.
The remaining $500,000 will come from the Women Entrepreneurship Finance Initiative (We-Fi), a partnership between governments, multilateral development banks and other public and private sector stakeholders hosted by the World Bank.
Sarmayacar is a Pakistan-focused venture capital firm led Rabeel Warraich and Bernhard Klemen, former investment bankers at GIC, Morgan Stanley and JP Morgan.
Last November, Sarmayacar announced the first close of its $30-million fund, making it Pakistan’s largest VC fund to date. The fund targets seed to early-stage deals, writing cheques in the range of $100,000 to $2 million for select startups in the country.
“Pakistan offers a unique opportunity with its improving stability, large, young population, rising middle class, fast-growing internet and smartphone penetration, and a dearth of venture capital in the ecosystem,” said Rabeel Warraich, founder of Sarmayacar.
“This marks the first such investment from the World Bank Group in Pakistan and will enable us to back more startups in the country, while also providing access to a global network, new markets and domain expertise to our portfolio companies,” added Warraich.
Nadeem Siddiqui, IFC’s Senior Manager for Pakistan and Afghanistan said: “The early stage of local venture capital ecosystems is often the most crucial building block for sustaining healthy entrepreneurship and innovation, which helps to drive economic growth and create quality jobs.”
Siddiqui continued: “Our aim is to support these entrepreneurs by helping to bridge issues around insufficient seed capital and strengthen the entrepreneurial ecosystem in Pakistan.”
Apart from IFC, Sarmayacar’s $30-million fund is also backed by individuals from GIC and other investors. Sarmayacar’s portfolio companies include Bykea, a ride-hailing platform; PublishEx, a carrier billing company; ProCheck, a patient engagement services provider; and Patari, an online music portal.
