The European Bank for Reconstruction and Development (EBRD) has made its first equity investment in a venture capital fund in the West Bank, committing US$ 3 million to Ibtikar Fund II. This new fund, managed by Ibtikar, a institutional-quality fund manager in the region, is aimed at strengthening the growing venture capital ecosystem in the West Bank and Gaza.
Ibtikar Fund II is designed to drive long-term capital growth by investing in up to 25 early-stage Palestinian tech startups. The fund also has the flexibility to invest in selected companies from neighboring countries that have connections to the West Bank and Gaza.
The fund successfully closed with US$ 25 million in commitments, surpassing its initial target of US$ 15 million and doubling the size of its first fund.
Small and micro-businesses are vital to the Palestinian economy, representing over 98% of local enterprises and contributing more than 60% of the gross domestic product. However, these businesses face significant economic challenges, particularly in terms of access to capital. Ibtikar aims to provide Palestinian tech startups with the resources they need to grow, tap into new markets, and contribute to sustainable development. By supporting young entrepreneurs and fostering job creation, particularly among women, Ibtikar hopes to advance digitalization and strengthen economic ties between the West Bank, Gaza, and neighboring countries.
Anne Fossemalle, EBRD Director for Private Equity Funds, expressed enthusiasm for the partnership, stating, “We are thrilled to support the growth of the early-stage innovation ecosystem in the West Bank through our collaboration with Ibtikar. This marks our first venture-capital investment in the region, and we look forward to helping local startups thrive, especially in these challenging times.”
Ibtikar’s Managing Partner, Habib Hazzan, also emphasized the importance of the collaboration, saying, “We are excited to welcome EBRD to Ibtikar Fund II. Together, we share a vision of empowering Palestinian entrepreneurs. This partnership will bolster our ability to fund innovative Palestinian startups that have the potential to become leaders in both regional and global markets, showcasing the maturity and attractiveness of the West Bank’s startup ecosystem to international investors.”
