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    Local Funds Prop Up Moroccan Startups as Foreign VC Remains on the Sidelines

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    Every year, as the calendar turns to the months of April, May, June, or July, thousands of tech enthusiasts and industry players flock to Marrakech, Morocco’s fourth-largest city. Nestled in the western part of the country, Marrakech has become a central hub for Africa’s expanding tech ecosystem, hosting events like the GITEX Africa summit, which has grown into one of the continent’s most prominent tech gatherings. 

    However, as the dust settles from the excitement of these events, a quiet revolution is taking place. There is a steady, if subtle, surge in local startup activity that appears poised to grow rapidly. Ghita Mezzour, Morocco’s Minister for Digital Transition and Administrative Reform, has acknowledged this emerging trend, noting that the government is keen on fanning its embers. She recently announced a 240 million dirham ($24 million) fund as part of the “Digital Morocco 2030” strategy, aimed at fostering innovation and international growth for local businesses. “We are committed to supporting our local startups by opening new markets and ensuring their ideas gain a foothold internationally,” Mezzour stated, reflecting her optimism about the future.

    Yet, in the heart of Casablanca, where Mezzour held a conference last year to rally support for Morocco’s tech ecosystem, the country’s venture capital (VC) sector, fueled primarily by homegrown funds, is already far ahead. These firms, rather than international players, are leading the charge in propelling Moroccan startups onto the continental stage.

    Azur Innovation Management, the manager of the Azur Innovation Fund (AIF), is one such key player. In 2020, the firm reached a total commitment of EUR33 million ($35 million) for the first close of AIF. Backed by both international and domestic investors, including the Dutch Good Growth Fund (DGGF) and the German Development Bank KfW, Azur Innovation is focused on supporting high-impact startups across Africa, with a particular emphasis on Moroccan companies. Last year, the VC participated in an $800K funding round for KWIKS, an artificial intelligence (AI)-driven recruitment startup. The firm’s portfolio also includes investments such as Agenz, Cloud Fret, Epicerie Verte, and Blink Pharma.

    This growing appetite for local funding has helped Morocco make significant strides in the African startup ecosystem. In 2024, according to the annual “Africa: The Big Deal” report which tracks funds coming to African startups, Moroccan startups raised $70 million, placing the country in fifth position for startup funding in Africa, just behind Kenya, Nigeria, Egypt, and South Africa. This represents a significant leap for Morocco, which ranked 15th just seven years ago and raised only $17 million in funding in 2023, accounting for a mere 0.4% of the continent’s total.

    Azur Innovation Management is far from the only local VC contributing to this upward trajectory. CDG Invest, a subsidiary of Morocco’s state-owned financial institution Caisse de Dépôt et de Gestion (CDG), has also been instrumental in the country’s startup ecosystem. CDG Invest’s acceleration program, 212 Founders, has backed numerous local startups, including LYNKO, Lacaisse.ma, Saweblia, and GOAcommerce. The firm’s most recent initiative, the Génération Entrepreneurs program, offers financial support of up to 20 million dirhams (USD2 million) alongside strategic guidance, helping innovative companies in sectors like industry and services.

    The Innov Invest Fund, managed by the Moroccan Association for Research and Development (R&D Maroc) and supported by the state-backed credit guarantee company Tamwilcom, also plays a central role. The Innov Idea program has funded over 30 startups, supporting product development and patent filings. Meanwhile, R&D Maroc’s “Tech Start” initiative provides grants of up to 400,000 dirhams (USD40,000) to startups that are ready to develop prototypes or Minimum Viable Products (MVPs), covering up to 80% of project expenses.

    Additionally, Maroc Numeric Fund II (MNF), which has funded numerous Moroccan startups, remains a key player despite facing challenges, including its major significant loss with the Moroccan-Canadian fintech company Yallah Xash. The fund, managed by MITC Capital, has further diversified its investment strategy by reaching out to the Moroccan diaspora. 

    EmergingTech Ventures, another local venture capital firm, recently raised $60 million for its second fund, Emtech II, with a target first close of $40 million. The International Finance Corporation (IFC) has committed to contributing $4 million to the fund, which will focus on early-stage startups across Morocco and other emerging markets in Africa.

    Morocco now boasts the highest concentration of local VCs in Francophone Africa, with other firms like Outlierz Ventures, UM6P Ventures, Al Mada Ventures, and Kalys VC contributing to the ecosystem’s growth. Despite challenges, including recalibrations in investment strategies following the failure of startups like NetPeas and OnePay, the local VC landscape remains vibrant.

    Public funding initiatives have further solidified this momentum. The Mohammed VI Investment Fund (FM6I) recently launched a $150 million startup fund, attracting significant interest from both local and international venture managers.Of the 47 applications received, 12 were Moroccan funds, highlighting the growing confidence in the country’s tech startups.

    While Morocco still has significant ground to cover in terms of regulatory reform and increasing its share of international funding, the growing importance of local VC funds cannot be ignored. These homegrown firms are proving to be the backbone of Morocco’s startup ecosystem, playing a pivotal role in shaping the country’s tech future.

    With local VC funds driving the majority of the funding to Moroccan startups, the country is positioning itself as a key player in Africa’s tech revolution. As the government continues to offer more targeted support, Morocco’s entrepreneurial ecosystem looks set to thrive, even in the face of limited foreign investment. The journey has just begun, and it is one that local VCs are determined to lead.

    InvestorLocationInvestmentsSector(s)Stage
    Maroc Numeric FundMoroccoDamanesign; OnePay; Atlan Space; Yalla Xash; KoolSkoolsDigital Trust; Fintech; Edtech
    SEAF Morocco Growth FundMoroccoSOS Credit IMMOFintech
    Emerging Markets Property GroupMoroccoMubawabProptech
    Mediterrania Capital PartnersMalta; Morocco; Algeria; Ivory CoastCofina GroupPrivate Equity
    CDG InvestMoroccoLYNKO; Lacaisse.ma; Saweblia; GOAcommerce; Kifal Auto; Invyad; Weego; FreteriumEarly Stage (Invests through 212Founders)
    Witamax One (Southbridge A&I, AXXAM Family Office)MoroccoKezakoo; DataPathology; KontaEarly Stage
    Azur Innovation FundMoroccoEpicerie VerteEarly Stage
    INNOV INVEST FundMorocco“Hob Feel Good”Early Stage
    Dislog GroupMoroccoLogistics Startup
    MFoundersMoroccoAlyaFintech; Early Stage
    HsevenMoroccoDebt Financing
    Outlierz VenturesMoroccoWaystocap; HealthlaneHealthcare; Retail Logistics
    Al Mada VenturesMoroccoUserguestEarly Stage
    Kalys VCMoroccoUserguestEarly Stage
    UM6P VenturesMoroccoUserguestEarly Stage

    A cross-section of funds targeting Moroccan startups.

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