Ramallah-based venture capital (VC) firm Ibtikar announced today the first closing of its second fund, Ibtikar Fund II CV, at $15 million, out of a target fund size of $30m, nearly three times the size of Fund 1.
Through its second fund, the leading Palestinian VC fund aims to continue investing in Palestinian tech start-ups based in Palestine, as well as Palestinian founders throughout the MENA region. The fund’s investments will focus on early-stage companies (seed and pre-Series A) building scalable businesses targeting global or MENA markets.
“We are very proud that investors from Fund 1 have strongly invested in Fund 2. Most of them have increased their investment amount, doubling down not only in our team, but also in the potential of Palestinian stratus,” said Ambar Amleh, managing partner at Ibtikar Fund.
In 2021, VC deals in emerging venture markets peaked at $6.8 billion, a 267 percent increase compared to 2020 – the highest level ever, according to MAGNiTT’s Emerging Venture Markets report. Turkey and the UAE together accounted for 44 percent of all venture capital invested, and one mega-deal was closed by a UAE, Egyptian, and Saudi start-up respectively.
However, the Palestinian start-up ecosystem remains underfunded and fragmented with limited connections to regional and international markets. In the first half of 2021, out of the 249 MENA start-ups that raised investment, just one of them was Palestinian (Kenz), according to Wamda Capital.
“Through Fund 1, we invested in various companies that are growing throughout the Middle East, Europe, and the Americas. We are excited that through Fund 2 we will be able to build on this momentum and provide much needed funding for the next wave of Palestinian start-ups. Our pipeline is strong and we look forward to announcing our first investments soon,” said Habib Hazzan, managing partner at Ibtikar Fund.
Ibtikar Fund 1 made early-stage investments in 26 start-ups, including Mashvisor, Gamiphy, Kenz, LogesTechs, 360Moms, and Tawazon.
The fund is led by managing partners, Habib Hazzan and Ambar Amleh, with the Bank of Palestine being its anchor investor. The initial closing witnessed contributions from institutional investors, including the Dutch Good Growth Fund, managed by Triple Jump BV and PwC; the International Finance Corporation, joined by numerous private and corporate investors from Palestine and the diaspora; as well as key regional and global leaders in the tech and venture capital scenes.
With VC funding being a crucial factor for the success of start-ups and the Palestinian ecosystem in dire need of new emerging funds, Youssef Habesh, IFC’s resident representative in the West Bank and Gaza, said: “Venture capital is critical to helping start-ups in West Bank and Gaza reach scale and compete both regionally and internationally.”
“That in turn could have a powerful impact on the local economy. Technology companies have the potential to become engines of job creation, which is key in a market where unemployment, especially for women and youth, is a challenge,” he added.
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