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Case Studies

Structuring Study of a Blended Finance Facility for the Near East Foundation

Advisory Case Studies

Structuring Study of a Blended Finance Facility for Agri-tech Startups in Morocco (and the MENA region)

Client

Near East Foundation

iGravity advisory modules

Design, Implementation.

Type of project

Design of a Blended Finance Facility, Explore the Moroccan startup ecosystem with the potential for leveraging blended finance; (there is some potential for implementation support, but that is only relevant for a later stage in the project).

Sector

Agriculture, Agri-tech, Innovative solutions to enhance the sustainability and efficiency of agricultural processes (efficiency in water usage, circular economy, sustainable production of crops, etc.).

Project description

iGravity supports the Near East Foundation in designing and setting up of a blended finance facility focussed on supporting Agri-tech start-ups in Morocco. Building on NEF’s YCII incubator program, the facility aims to bring together a variety of stakeholders – foundations, investors, governmental actors – to create a sustainable flow of capital and support to (early-stage) startups bringing innovative solutions to enhance the efficiency and sustainability of agricultural processes. iGravity’s supported NEF through leveraging insights from the YCII incubator program to assess and propose blended financial structures for NEF, evaluating their suitability, scalability, and financier interest. This was followed by conducting an in-depth structuring study, financial modeling, and engagement with potential financiers to design a robust governance and funding framework that aligns with impact goals.

Early-stage agri-tech startups in Morocco face significant barriers to growth due to limited access to capital, lack of business expertise, and a fragmented support ecosystem. This problem is in particular prevalent for startup in the very-early (post-ideation) stage. When it comes to startups that drive innovative solutions in the agricultural space in Morocco, investors are often reluctant to fund startups with little proof of concept, restricting early-stage innovation. Additionally, many startups struggle to access the industry connections and business skills necessary to scale. The broader ecosystem also lacks coordination, limiting the effectiveness of existing support programs and investor engagement.
The establishment of a blended finance facility addresses these challenges by sustaining the support proven so effective coming out of the YCII program, as well as by = mobilizing diverse funding sources to de-risk early-stage investment. By pooling capital from public, private, and philanthropic actors, the facility increases the availability of financing, particularly for startups needing smaller ticket sizes that are often not qualified for financial support from facilities, VCs and PE. In addition to funding, it provides structured business support, including mentorship and technical assistance, as well as technical expertise, equipping startups with the skills needed for long-term sustainability. Finally, the facility strengthens the ecosystem by coordinating key stakeholders, ensuring a more integrated and supportive environment for startup growth. As a result, the facility can serve as a catalyst for driving more organized support around early-stage startups in the Moroccan ecosystem.

What is the Problem?

Early-stage agri-tech startups in Morocco face significant barriers to growth due to limited access to capital, lack of business expertise, and a fragmented support ecosystem. This problem is in particular prevalent for startup in the very-early (post-ideation) stage. When it comes to startups that drive innovative solutions in the agricultural space in Morocco, investors are often reluctant to fund startups with little proof of concept, restricting early-stage innovation. Additionally, many startups struggle to access the industry connections and business skills necessary to scale. The broader ecosystem also lacks coordination, limiting the effectiveness of existing support programs and investor engagement.

What is the Solution?

The establishment of a blended finance facility addresses these challenges by sustaining the support proven so effective coming out of the YCII program, as well as by = mobilizing diverse funding sources to de-risk early-stage investment. By pooling capital from public, private, and philanthropic actors, the facility increases the availability of financing, particularly for startups needing smaller ticket sizes that are often not qualified for financial support from facilities, VCs and PE. In addition to funding, it provides structured business support, including mentorship and technical assistance, as well as technical expertise, equipping startups with the skills needed for long-term sustainability. Finally, the facility strengthens the ecosystem by coordinating key stakeholders, ensuring a more integrated and supportive environment for startup growth. As a result, the facility can serve as a catalyst for driving more organized support around early-stage startups in the Moroccan ecosystem.

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