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Rabat – The Ministry of Digital Transition and Administrative Reform (MTNRA) signed on Tuesday an agreement with the state-owned financial institution CDG and its investment arm, CDG Invest, to fortify and implement a comprehensive support and funding framework tailored specifically for Moroccan startups.
The agreement was signed by Ghita Mezzour, Minister of Digital Transition and Administrative Reform, Khalid Safir, General Director of CDG, and Yassine Haddaoui, General Director of CDG Invest.
The partnership “comes in response to royal directives calling for the digital sector to become a lever for economic and social development,” the signing parties said in a statement, adding that the agreement “complements existing initiatives to strengthen the national startup ecosystem.”
The framework outlines initiatives, encompassing financial provisions and mentorship programs meticulously crafted to nurture startups at every stage of their evolution – from incubation to acceleration and funding.
It proposes several mechanisms that offer financing or support to startups at different stages of their life cycle to encourage their creation, growth, and development through incubators, accelerators, and financing structures.
To support startups in their fundraising efforts, the agreement paves the way for the structuring of investment vehicles to support their development.
One of the standout proposals included in the agreement is the “living allowance,” an initiative that supports experienced idea holders to venture into entrepreneurship and create their startups while receiving financial compensation.
“We’re going to give financial support to people who have careers and have experience and want to quit their jobs to create a startup,” Ghita Mezzour told Morocco World News (MWN) on the sidelines of signing the agreement.
Read also: CDG Invest Funds Moroccan Artificial Intelligence Startup Palm
For its part, the CDG Group and its investment arm pledged to support innovation and promote Moroccan entrepreneurship, notably by providing the necessary assistance to startups across Morocco.
The two institutions are set to support Moroccan startups to boost the integration of their operation by introducing them to investors, accelerators, and incubators.
According to the statement, specific agreements will complement the framework agreement to implement the different proposed measures and involve public and private actors within the ecosystem.
Minister Ghita Mezzour welcomed the partnership with CDG in comments to MWN.
“The partnership aims to provide financial support to startups for their entire lifecycle. It will be followed by more specific partnerships with specific measures to help the startups,” she argued.
“This is just an example of the royal vision to promote startups and to encourage Moroccan youth to innovate and to create startups and to produce Moroccan digital solutions for our national needs and also for international needs..” Prior to signing the agreement, CDG Invest had been actively incubating Moroccan startups through a special program known as “212 founders.”
The 212 Founders program has financed 12 startups since its launch in 2019, funding initial and late-stage operations under a total investment of MAD 57 million ($5.7 million).
The program offers startups up to MAD 7 million in initial funding and up to MAD 10 million in late-stage funding in its “Series A” program.
In recent years, Morocco has launched a number of programs to incubate startups and stimulate the emergence of a startup ecosystem in the country.
Despite the gradual growth in the country’s startup ecosystem, it still faces significant challenges. Lack of capital, the prevailing fragmented markets, lack of quality education, and suboptimal infrastructure are all weighing down on startups’ growth prospects, experts have pointed out.
