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US Government backs GIF to finance start-ups in emerging markets.

Jul 30, 2024

GIF is delighted to have secured a $10 million loan from the U.S. International Development Finance Corporation (DFC) to support our new purpose-built returnable capital vehicle, GIF Growth. The loan will help to fund highly developmental early-stage businesses in Sub-Saharan Africa, South Asia, and Southeast Asia.

The investment was confirmed earlier this month as part of a $5.1 billion funding package for 42 projects that advance US foreign policy objectives and drive developmental impact across the globe.

Through GIF Growth, GIF is seeking to fill the financing gap for early-stage companies in emerging markets. Less than 1 in 6 companies in emerging economies raise follow-on funding in the five years after they raised seed funding. Without consistent funding pipelines, innovations that have significant potential to improve the lives of poor people across the developing world may be lost.

Through a blended finance vehicle, GIF Growth aims to de-risk high-impact companies which would otherwise be deemed too risky for returns-driven investment. By de-risking companies in their early growth stage, GIF Growth opens the door to further investment from DFIs and private investors down the line, enabling companies to fulfil their growth and impact potential in the long run.

Avinash Mishra, our Chief Investment Officer and Head of GIF Growth, welcomed DFC’s support.

“Through GIF Growth, we will be able to make investments that meet the needs of high-impact innovators with proven business models who are well positioned to scale their business and impact,” he says. “We will act as long-term patient capital investors, with the ability to structure flexible and customised instruments ranging from equity, debt, and convertible-debt.

“With many high-impact innovators in emerging economies struggling to realise their full growth and impact potential due to financing constraints, it is vital that we work to crowd in additional investment. We will use our experience of investing in the world’s toughest markets to help innovators maximise their growth and impact.”