Early Stage Funds Engaging Green Ventures in Morocco & International Impact Investor Matching
Description of project
The objective of IFC’s Morocco Climate Entrepreneurship project was to contribute to unlocking clean technology markets in Morocco by building the capacity of the Cluster Solaire and Moroccan ecosystem players to support green ventures in Morocco. This, in turn, helped contribute to creating high-quality jobs in the sustainable energy and other cleantech sectors while helping Morocco mitigate and adapt to climate-related challenges through local solutions and stimulating growth.
Many of the pieces necessary for a climate entrepreneurship ecosystem were in place in Morocco, including active support organizations, a willing government, education and research centers with potential for impact, and investment from the domestic and international community. Morocco’s entrepreneurship ecosystem was made up of a few local and international support organizations, many of which were concentrated in the early-stage support space (i.e., Startup Maroc, Espace Bidaya, Impact Lab/Numa, etc.), most of which had emerged recently, particularly after the GES summit in 2014.
A robust climate entrepreneurship ecosystem had strong and frequent informal and formal linkages between different levels of ecosystem players, as seen from sophisticated ecosystem mappings carried out in developed ecosystems by Endeavour, among others. These linkages were important to: 1) pool resources efficiently; 2) familiarize investors with the pipeline; 3) strengthen support services and address ecosystem gaps; 4) potentially facilitate matchmaking, B2B, or entrepreneur-to-entrepreneur linkages. However, as mapped out by the Climate Entrepreneurship Ecosystem Diagnostic (CEED) carried out in 2017, most of the ecosystem players in the climate entrepreneurship ecosystem had few formal or informal relationships, and there were currently few joint or collaborative programs and networking events across the ecosystem.
Although there was a growing service offering of early-stage funding available in Morocco for green ventures, notably through the Innov’Invest program supported by the World Bank, there was still a significant and acute funding gap at the early stage, which disproportionately affected cleantech entrepreneurs due to their novel business models, market uncertainties, often comparatively higher capital requirements, and longer growth trajectories.
The Cluster solaire, through the Morocco climate entrepreneurship project and together with the IFC, commenced working in April 2018 on one side of this equation, through better preparation of green ventures across the Moroccan entrepreneurship ecosystem to access funding through both investment readiness training and hands-on coaching, as well as ecosystem building and networking.
The core goal of the proposed work was to provide a) hands-on training; peer-to-peer learning and networking opportunities to Moroccan early stage funders on green sectors and investment strategies (angels, commercial investors, corporate investors, DFIs, foundations, and impact investors) and b) boost investments or co-investment opportunities for Moroccan startups and young SGBs.
The final aim of the services was to boost early stage investment or co-investment in cleantech ventures that were growing (as defined by revenue and/or job creation growth), with the expectation that out of the program at least three entrepreneurs were in an active and formalized process of securing follow-on funding with Moroccan or international early-stage funders.
To this end, Aninver carried out the following activities, in very close collaboration with the IFC, the Cluster Solaire CEO, and the team leading the project’s component 2 (investment readiness program), planned over a period of 12 months from contract signature and launch (planned for end November 2019) and potentially renewable for 3 to 12 months, based on satisfactory performance:
• Inception workshop
• Rapid diagnosis (short report) of early stage green enterprises / businesses and pipeline flow and investors in Morocco
• Program trainings and networking events
• Study Tour:
• international investors matchmaking
• Project documentation