May 12, 2017 | Industry News

Four lessons from a $50 million bet on tech startups in the Middle East

The team at

ImpactAlpha

The International Finance Corp. has invested $50 million in the past three years in startups and funds, such as a $70 million Wamda Capital fund, to promote economic inclusion in the Middle East.

The lessons: mixed. “If I get two or three companies out of Wamda, that in my mind is a success,” Dimitris Tsitsiragos, IFC’s vice president, told Forbes contributor Elizabeth MacBride. “The failure rate in this space is high.”

MacBride’s set of early lessons includes: 1) Tech startups don’t employ many people, but ripple effects can transform industries and create jobs. 2) The impact of venture capital investments are hard to measure. For example, what’s the impact of a successful fintech startup that provides insurance that let’s more women become entrepreneurs?

3) Big exits are possible, but rare. 4) And accelerators can speed growth. The IFC’s investment in Flat6Labs in Cairo has led it to backing accelerators elsewhere.

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The team at

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March 17, 2023

The Brief

The Week’s Podcast

Ben McAdams: Marrying public real estate and private capital (podcast). What is the net worth of Salt Lake City? It’s a relatively straightforward exercise to total up the balance sheet of a company or an individual. But many cities don’t know what they own, much less what it’s all worth. As mayor of Salt Lake County a decade ago, Ben McAdams was frustrated that there wasn’t $500,000 in a $1.3 billion annual budget for a promising early-childhood education program (so he helped craft one of the country’s first social impact bonds). But an effort he led to map the value of the city’s underutilized real estate yielded an impressive number: at least $15 billion, and up to $45 billion if properties are developed thoughtfully. “I found out there is actually money under our mattress,” McAdams tells David Bank on this week’s Impact Briefing podcast. “It's real estate that is just forgotten.”After his single term in Congress (as a Democrat from a deep red state), McAdams has been working with a half-dozen cities to tap the riches in underutilized public real estate. His "Putting Assets to Work" policy incubator is working with Atlanta, Cleveland, Annapolis, Chattanooga, Lancaster, Calif., and Harris County, Texas, which have similarly found billions in untapped assets. The next step is to help cities deploy those assets to generate income that will fund essential services. A city that contributes, say, a $5 million parcel toward a $20 million housing project (with private investors supplying the rest) could earn 25% of the rental income. At scale, McAdams says, “You're funding education. You're solving affordable housing. You're solving homelessness. You are investing in roads and bridges and filling potholes. And then you’ve still got enough money left to cut taxes.” Some of the cities are close to closing their first deals; Sorenson Impact Group is incubating a “community equity fund” based on McAdams’ work. “It's real revenue that's out there,” he says, “if we can just figure out the right systems and then bring in the private capital to do it.”

The Week’s Dealflow

Dealflow spotlight: Emerging market investors spot opportunities in essential products and services. Economic uncertainty has kept many investors out of emerging markets. Seasoned impact investors know where to spot steady and growing opportunities. “These are such essential services that we know businesses will continue to have these needs,” said Amee Parbhoo of Accion Venture Lab, which invested in three companies in Asia introducing financial services to small businesses in manufacturing, logistics and agriculture.

The Week’s Talent

Carol Adams, professor of accounting at Durham University Business School, is named chair of the Global Sustainability Standards Board. She takes the reins from Judy Kuszewski… Alex Amouyel is stepping down as MIT Solve’s executive director to join Newman’s Own Foundation as president and CEO… Eric Wilburn has resigned as Earthshot Labs’ head of product.