ImpactAlpha, February 17 – Ibtikar Fund is building on the thesis of its first fund from 2016: that Palestinian tech entrepreneurs building regional and global businesses are an undertapped VC opportunity.
“Technology is borderless. You can build a tech company from here, you can support markets anywhere from here, and it can be done profitably and effectively,” Ibtikar’s co-founder Ambar Amleh told ImpactAlpha.
The Bank of Palestine anchored the Ramallah-based fund manager’s second fund, which is targeting a $30 million close later this year. The Dutch Good Growth Fund kicked in $6 million. The International Finance Corp. and a number of Palestinian investors also participated. A portion of the IFC’s commitment is tied to the Women Entrepreneurs Finance Initiative, or We-Fi, a World Bank-led effort to mobilize $3 billion for women entrepreneurs in emerging markets.
Amleh launched Ibtikar with Habib Hazzan and Reem Qawasmi to help promising businesses in the West Bank and Gaza graduate from startup accelerators to seed and Series A investment rounds.
“There was a lot of intense effort at the ideation stage of business, and then nothing,” she explained. “So if you had a good idea, there was no one to fund you.”
Ibtikar’s first fund raised $10.4 million within a year of fundraising and has made 26 investments. Its portfolio includes Mashvisor, a provider of global real estate investment data, and Tawazon, an Arabic language meditation app.
Ibtikar’s second fund will continue cutting early checks to tech startups in the West Bank and Gaza. Thirty percent of the fund will be allocated to Palestinian founders in the broader Middle East region. Ibtikar also expects to cut larger checks with this fund. It expects deals to average around $500,000, up from $200,000 in its first fund.
“The cost of labor has gone up tremendously, especially for tech labor,” explained Amleh. “Also, we realized we were doing $200,000 investments and companies were still not at the level they needed to be to attract regional VC funding.”
Forty percent of Ibtikar’s portfolio is comprised of women-led ventures. Amleh says that in spite of the Middle East’s male-centric reputation, the real barrier to investing in more women is the lack of women-led fund managers.
“It’s so important to have women around the investment committee table,” she said.
One of the companies Ibtikar has backed is 360Moms, an online community that provides information, education and product reviews for parents.
“This is a huge opportunity, because when you have a baby, all you do is Google things,” said Amleh, who is herself a mother to two children. “So having a woman at the table means there is someone there who understands the needs of women a bit more.”