Ibtikar Fund, a pioneering venture capital firm focused on Palestinian tech startups, has announced the final closing of its second fund, Ibtikar Fund II CV, at USD 25 million. This significant milestone underscores the growing potential of the Palestinian entrepreneurial ecosystem and marks the European Bank for Reconstruction and Development’s (EBRD) first-ever equity investment in a venture capital fund in the West Bank.

Boosting Palestine’s Tech Ecosystem with EBRD as a Partner

The inclusion of the EBRD as a Limited Partner, with a USD 3 million investment, represents a vital step forward in the fund’s efforts to accelerate the development of tech-driven companies in Palestine. This investment also underscores EBRD’s commitment to fostering innovation and job creation in emerging markets, particularly in sectors like artificial intelligence (AI), e-commerce, and fintech. Anne Fossemalle, EBRD’s Director for Private Equity Funds, emphasized the bank’s dedication to supporting Palestine’s digital economy. “We are pleased to support Ibtikar Fund II in advancing the digital economy and creating jobs, especially for women and youth. This investment aligns with our mission to drive sustainable growth in emerging markets.”

Investing in Scalable Palestinian Startups

Ibtikar Fund II is set to invest in up to 25 early-stage tech companies, focusing on scalable business models that have the potential to expand regionally and globally. According to Ibtikar’s Managing Partner, Habib Hazzan, “This collaboration with the EBRD will enhance our ability to fund innovative Palestinian startups that will become leaders in regional and global markets, proving that Palestine’s startup ecosystem has matured and is attractive to international investors.”

Since its inception, Ibtikar Fund II has drawn considerable interest from institutional and private investors alike. Notable contributors include the Bank of Palestine, the Dutch Good Growth Fund (DGGF), and the International Finance Corporation (IFC). This influx of capital into Palestinian startups comes at a critical time, as the region’s tech ecosystem continues to evolve, offering new opportunities for entrepreneurs.

Early Success Stories: DataQueue, Mental, and Vatrin

Ibtikar Fund II has already made significant investments in local startups like DataQueue, Mental, and Vatrin. These companies are rapidly expanding beyond Palestinian markets and making a significant impact in the broader Middle Eastern region. Each of these startups operates within key sectors that are central to Ibtikar’s investment strategy—sectors that promise scalability and regional relevance. For instance, DataQueue, which focuses on artificial intelligence solutions, has already begun scaling its operations across the Middle East, highlighting the regional growth potential of Palestinian tech startups.

A Broader Vision for Regional and Global Growth

The final closing of Ibtikar Fund II is not just a win for the fund but also a key moment for the Palestinian startup ecosystem as a whole. With substantial investments targeting tech companies capable of achieving regional and global scale, the fund is strategically positioning Palestine’s startup scene as a serious contender on the international stage. By prioritizing early-stage capital, Ibtikar aims to close a funding gap that has long impeded the growth of local tech ventures. “This final closing marks an important step in our mission to provide much-needed capital to Palestinian founders, supporting them as they scale their businesses and fostering a tech ecosystem that is resilient and future-focused,” said Ambar Amleh, Managing Partner at Ibtikar.

Ibtikar Fund II’s ambition to elevate Palestinian startups to global prominence aligns closely with the vision of its investors. The EBRD’s involvement, in particular, signals a growing recognition of Palestine’s untapped entrepreneurial potential. As EBRD’s Fossemalle pointed out, the bank’s investment will create much-needed jobs in Palestine, with a special focus on empowering women and youth in tech-driven fields.

As Ibtikar Fund II embarks on this next phase of its journey, it is clear that the fund is positioned to play a transformative role in the Palestinian economy. With a sharpened focus on enabling startups to access international markets, the fund is not only driving immediate business growth but also contributing to the long-term sustainability of the region’s tech ecosystem. By channeling investments into sectors with high growth potential and a focus on innovation, Ibtikar is fostering a new generation of Palestinian entrepreneurs ready to make a global impact.