The World Bank is satisfied with the achievements of the Innov Invest Fund

Wednesday, June 8, 2022

The World Bank, in collaboration with the Ministry of Finance, has just completed a new progress report on the Innov Invest Fund (IFI). At the end of a joint mission, held from October 2021 to February 2022, "Innov Invest remains a satisfactory project, which has mobilized $ 47.3 million in private capital from 15 local and international investors for the benefit of Moroccan startups," says a report from the World Bank, of which "Le Matin" has a copy. And "Despite the negative impacts of the crisis of the Covid-19 on the entrepreneurial ecosystem in Morocco, the project continued its deployment, thanks to the responsiveness of the Ministry of Finance and "Tamwilcom", it is stressed.

As a reminder, the Bretton Woods Institution is the main funder of the Innov Invest scheme, managed by "Tamwilcom" (Ex CCG), through a loan of 500 million DH (50 million dollars). Officially launched at the end of October 2017, the IFI aims to increase the supply of innovation and seed financing for innovative project holders and startups during their initial development phases, particularly through the mobilization of private sector financing. This device aims to ensure a continuum of funding for project holders and startups, from the idea stage to growth.

According to the progress report, "Tamwilcom" has 19 accredited partners (3 fund managers and 16 incubators) with a portfolio of 477 companies as of December 31, 2021. The total funding received by these investee companies amounts to $24.7 million as of December 31, 2021, including $24.3 million for 17 equity transactions, $6.8 million for 381 seed grants, and $3.1 million for 79 soft loans. In addition, "Tamwilcom" released $2 million from the IFI to provide technical assistance to the three partner venture capital funds.

Compared to the objectives set for 2023, in terms of private capital mobilized, the $ 24.3 million committed by Innov Invest in the three funds have raised an additional $ 47.3 million for their closure, exceeding the target of $ 30 million. In addition, the targeted number of supported companies that introduced an innovation reached 432, exceeding the goal of 100. On the other hand, the number of startups receiving private equity funding through the project did not grow as quickly as expected with 17 startups out of a goal of 60 by 2023. According to the report, this is due to the Covid-19 crisis, the delay in the Business Angels component, but also due to the structuring of the three operational funds supported by Innov Invest and the dissolution of the Green Innov Invest Fund (GNII). Remember that for the launch of the activities of the "FII", private partners have been selected on the basis of specifications.

Thus, four management companies were initially selected to structure and manage seed and venture capital funds (Azur Innovation, Seaf Morocco Growth Fund, Morocco Numeric Fund II and Green Innov Invest. The mid-term review enabled the Ministry of Finance and the World Bank to identify areas for improvement and measures to be implemented to ensure that the IFI fully meets its objectives. For example, additional programmatic support and a financing instrument should be operationalized at the seed and acceleration stage to build a continuum of financing and advisory services for startups at all stages of their life cycle. Also, the internal processes of the FII scheme will be improved, in particular to facilitate funding and investment by intermediaries.

In addition, the government is committed to ensuring the sustainability of incubators, which are essential upstream players in the entrepreneurial pathway and which have been weakened by the Covid-19 crisis. It is also committed to developing the legal and regulatory framework to improve the business environment. The government and the World Bank now plan to operationalize the recommendations identified and decide whether the impact of the project can be amplified through restructuring or additional financing.

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