Agadir – Morocco has mobilized more than $70 million in private investment for startups through a decade-long financing initiative backed by the World Bank, which says the program helped establish a venture capital market and expand funding opportunities for entrepreneurs.
In a report published today, the World Bank said the InnovInvest initiative, launched in 2016 with $50 million in World Bank financing, mobilized private capital worth 2.4 times its initial target and established four venture capital funds.
The program also supported nearly 1,000 entrepreneurs, helped create more than 4,000 direct jobs, and attracted international development finance institutions to invest in Moroccan-domiciled funds.
“Morocco’s experience over the past decade offers a compelling answer to what it takes to change that: targeted, well-governed public intervention, sequenced over time and designed to crowd in private capital rather than replace it,” the World Bank said.
Building a venture capital market
Before InnovInvest, Morocco’s startup financing ecosystem faced significant barriers, with banks requiring collateral that many entrepreneurs could not provide and limited access to grants and equity investment.
According to the World Bank, only 6% of equity investment went to startups in 2015, while most investment funds focused on larger, established companies rather than early-stage businesses.
The initiative sought to address this gap by encouraging private investors to finance innovative companies through a public co-investment model implemented in partnership with Morocco’s Ministry of Finance.
Through Tamwilcom, the country’s national guarantee and financing agency, the government invested alongside private investors in venture capital funds. The model allowed the public sector to accept a smaller share of potential returns while leaving investment decisions to professional fund managers.
The World Bank said the approach helped establish four professional venture capital funds and mobilize more than $70 million in private capital.
One of these funds became the first Morocco-domiciled fund to attract international development finance institutions, including the International Finance Corporation (IFC) and France’s Proparco, alongside domestic private investors.
The report linked this development to improvements in Morocco’s private equity regulatory framework, which the project helped inform, alongside technical assistance provided through the Joint Capital Market Program.
Nearly 1,000 entrepreneurs receive support
Beyond investment, InnovInvest helped strengthen the infrastructure supporting startups and entrepreneurs across Morocco.
The program accredited 16 incubators and accelerators, which support entrepreneurs in developing business ideas and preparing companies to attract investment.
Nearly 1,000 entrepreneurs received pre-seed grants, soft loans, or mentoring, while the initiative helped create more than 4,000 direct jobs.
Women-led companies accounted for 27% of financing, exceeding the project’s gender target, according to the World Bank.
The initiative also helped identify regulatory barriers affecting the startup ecosystem, including issues related to foreign exchange and minority investor protection. The report said parallel policy reforms addressed these constraints.
The World Bank argued that combining financial support with regulatory changes helped establish conditions for private investment to grow, rather than relying on public funding alone.
Morocco is now applying lessons from InnovInvest to a broader financing framework designed to support businesses at different stages of development, from initial ideas to expansion.
The World Bank said the approach has informed eight projects across the Middle East, North Africa, Afghanistan, and Pakistan region, representing more than $500 million in financing.
