The World Bank Implementation Status & Results Report Financing Innovative Startups and Small and Medium Enterprises Project (P150928) Financing Innovative Startups and Small and Medium Enterprises Project (P150928) MIDDLE EAST AND NORTH AFRICA | Morocco | Finance, Competitiveness and Innovation Global Practice | IBRD/IDA | Investment Project Financing | FY 2017 | Seq No: 7 | ARCHIVED on 21-Oct-2021 | ISR48173 | Implementing Agencies: Kingdom of Morocco, La Caisse Centrale de Garantie Key Dates Key Project Dates Bank Approval Date: 10-Mar-2017 Effectiveness Date: 28-Jun-2017 Planned Mid Term Review Date: 31-Jan-2022 Actual Mid-Term Review Date: Original Closing Date: 31-Dec-2023 Revised Closing Date: 31-Dec-2023 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The project objective is to facilitate the increase of private equity and quasi-equity finance for innovative startups and small and medium enterprises in the Project Area. Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Financing Program:(Cost $42.00 M) Ecosystem Support:(Cost $6.00 M) Project Management, Coordination and M&E:(Cost $1.87 M) Front-end Fee:(Cost $0.13 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Satisfactory Satisfactory Overall Risk Rating Moderate Moderate Implementation Status and Key Decisions InnovInvest remains a Satisfactory project with a track record of crowding-in US$ 47 M in private capital from 15 local and international investors for Moroccan startups and innovative SMEs. CCG has 19 accredited partners (3 fund managers and 16 support structures) that have a portfolio of 380 companies as of June 30, 2021. The total funding received by these beneficiary companies amounted to to US$ 19.8 M as June 30, 2021 i.e. (i) US$ 12.1 M for 14 equity deals, (b) US$ 5.4 M for 306 seed grants, and (c) US$ 2.3 M for 60 soft loans. Also, the CCG has deployed US$ 2 M of the FII to provide technical assistance to the three existing venture capital funds. One business angels’ network has been developed (Angels4Africa) and more are expected to receive support in 2021. All project targets are expected to be met or exceeded by project closing. Despite the COVID-19 crisis, deal-flow has been strong under the financing program (component 1). The project was restructured in October 2020 to mitigate the impacts of the pandemic on the Moroccan ecosystem (component 2). 10/21/2021 Page 1 of 6 The World Bank Implementation Status & Results Report Financing Innovative Startups and Small and Medium Enterprises Project (P150928) Thus, as of June 30, 2021 2 out of the 3 PDO indicators were exceeded:  PDO 1: Private Capital Mobilized: InnovInvest has committed US$ 24.25 M in funding to three funds which in turn have mobilized an additional US$ 47 million for their closing, exceeding the 2023 end target of US$ 30M. The overall size of the three funds is now at US$ 71.5 million as of June 30, 2021. A gap remains visible between the total private capital mobilization and mobilization of seed financing. Though it is possible to measure private capital mobilized in anticipation of its deployment (at the funds level), it is not possible to disaggregate upstream the deployment between angel/seed and VC stages (at the firms’ level) until the deals have taken place. o Private Angel/ Seed Stage Capital Mobilized through the Project: InnovInvest participating funds have invested 5 times in deal rounds below US$ 0.6 M (seed stage) for an aggregate amount of US$ 2.3 M, mobilizing US$ 1.5 M in private capital. Additionally, 1 business angel joined one of MNF II deal for a ticket of US$ 0.1 million. Thus, private angel/seed stage capital mobilized by the project stands at US$ 1.6 M as of June 30, 2021, versus an objective of US$ 5.0 M by 2023. Yet, the US$ 3.4 M to be mobilized at the seed stage remain fully achievable given: i) ongoing efforts by the implementation agency to support the intermediary partners to invest in the seed stage, ii) the future deployment of the business angel’s component, iii) a conducive economic context driven by the post-COVID recovery.  PDO 2: Firms supported by the project that have having introduced an innovation. This indicator stood at 361 firms, beyond the target of 100 by 2023.  PDO 3: Number of SMEs receiving private equity financing through the project: Currently with 14 SMEs out of a target of 60 by 2023, this indicator has not progressed as rapidly as expected, owing to the: i) time required to structure the three operational funds supported by Innovinvest, ii) dissolution of the GNII Fund, iii) delay of the business angel’s component, iv) economic impact of the COVID- 19 crisis on entrepreneurs and investors. Also, out of the 7 intermediate result indicators 4 were exceeded. Indicators related to the business angel activity are achievable but has not taken place so far due to the fragmentation and very early stage of the angel ecosystem in Morocco. This activity will be discussed in light of the conclusion of the upcoming midterm review. Finally, data on the share of beneficiaries satisfied with services received and performance of partner institutions must be transmitted by the implementation agency. Below is the status of the seven 7 intermediate result indicators:  No management company for managing the Angel/Seed fund has been contracted so far, versus an end target of 1: this goal remains fully achievable.  Three private fund managers were contracted to manage new public-private funds under the project, versus an end target of 3.  Three public private funds Shareholder agreements were completed, for an end target of 3.  366 entrepreneurs had received pre-seed grants and soft loans through the project as of June 30, 2021, 26% of the being women, exceeding the end target of 200 with 25% of women.  700 entrepreneurs have received mentoring and investment readiness support, exceeding the end target of 100.  No angel network has been developed under the project so far, versus 1 set as an end target.  The updated data on the share of beneficiaries satisfied with services received and performance of PIs is still to be communicated by the implementation agency mpaTable Multiphase Programmatic Approach (MPA) Status mpaTableBody Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance Moderate Moderate Moderate Macroeconomic Low Low Low Sector Strategies and Policies Substantial Moderate Moderate Technical Design of Project or Program High Moderate Moderate Institutional Capacity for Implementation and Moderate Moderate Moderate Sustainability Fiduciary Substantial Substantial Substantial Environment and Social Low Low Low 10/21/2021 Page 2 of 6 The World Bank Implementation Status & Results Report Financing Innovative Startups and Small and Medium Enterprises Project (P150928) Stakeholders Low Low Low Other Low Moderate Moderate Overall Substantial Moderate Moderate Results PDO Indicators by Objectives / Outcomes Facilitate the increase of private equity and quasi equity financing IN01037265 ►Private Capital Mobilized (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 47,000,000.00 47,300,000.00 30,000,000.00 Date 30-Sep-2016 29-Dec-2020 15-Oct-2021 31-Dec-2023 IN01037266 Private Angel/Seed Stage Capital Mobilized Through the Project (Amount(USD), Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 1,600,000.00 1,600,000.00 5,000,000.00 Date 30-Sep-2016 29-Dec-2020 15-Oct-2021 31-Dec-2023 IN01037267 Private Venture Capital Mobilized Through the Project (Amount(USD), Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 5,300,000.00 45,700,000.00 25,000,000.00 Date 30-Sep-2016 29-Dec-2020 15-Oct-2021 31-Dec-2023 IN01037268 ►Beneficiaries that introduced a new or, improved on an existing, product, process, or service under the projects (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 268.00 361.00 100.00 Date 30-Sep-2016 29-Dec-2020 15-Oct-2021 31-Dec-2023 IN01037269 ►SMEs receiving private equity financing through the project (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 12.00 14.00 60.00 Date 30-Sep-2016 29-Dec-2020 15-Oct-2021 31-Dec-2023 IN01037270 10/21/2021 Page 3 of 6 The World Bank Implementation Status & Results Report Financing Innovative Startups and Small and Medium Enterprises Project (P150928) SMEs receiving private Angel/Seed equity financing through the project (Number, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 5.00 5.00 20.00 Date 30-Sep-2016 29-Dec-2020 15-Oct-2021 31-Dec-2023 IN01037271 SMEs receiving private VC equity financing through the project (Number, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 7.00 9.00 40.00 Date 30-Sep-2016 29-Dec-2020 15-Oct-2021 31-Dec-2023 Intermediate Results Indicators by Components Financing Program IN01037272 ►Investment management company contracted to manage the Angel/Seed fund (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 1.00 Date 30-Sep-2016 29-Dec-2020 15-Oct-2021 31-Dec-2023 IN01037274 ►Private Fund Managers contracted to manage new public-private funds under the project (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 1.00 3.00 2.00 Date 30-Sep-2016 29-Dec-2020 15-Oct-2021 31-Dec-2023 IN01037276 ►Public-private funds Shareholder Agreements completed (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 2.00 3.00 2.00 Date 30-Sep-2016 29-Dec-2020 15-Oct-2021 31-Dec-2023 Ecosystem Support IN01037273 ►Number of entrepreneurs receiving pre-seed grants and soft loans through the project (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 275.00 366.00 200.00 Date 30-Sep-2016 29-Dec-2020 15-Oct-2021 31-Dec-2023 IN01037275 10/21/2021 Page 4 of 6 The World Bank Implementation Status & Results Report Financing Innovative Startups and Small and Medium Enterprises Project (P150928) Percent female entrepreneurs receiving pre-seed grants through the project (Percentage, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 26.80 26.00 25.00 IN01037277 ►Entrepreneurs receiving mentoring and investment readiness support (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 511.00 703.00 100.00 Date 30-Sep-2016 29-Dec-2020 15-Oct-2021 31-Dec-2023 IN01037278 ►Angel Network developed through the project (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 1.00 0.00 1.00 Date 30-Sep-2016 29-Dec-2020 15-Oct-2021 31-Dec-2023 IN01037279 Angel network members who received training through the project (Number, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 6.00 6.00 10.00 IN01037280 ►Beneficiaries satisfied with services received and performance of PIs (%) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 75.00 Date 30-Sep-2016 29-Dec-2020 15-Oct-2021 31-Dec-2023 Performance-Based Conditions Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P150928 IBRD-87240 Effective USD 50.00 50.00 0.00 46.24 3.76 92% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P150928 IBRD-87240 Effective 10-Mar-2017 16-Jun-2017 28-Jun-2017 31-Dec-2023 31-Dec-2023 10/21/2021 Page 5 of 6 The World Bank Implementation Status & Results Report Financing Innovative Startups and Small and Medium Enterprises Project (P150928) Cumulative Disbursements Restructuring History Level 2 Approved on 22-Oct-2020 Related Project(s) There are no related projects. 10/21/2021 Page 6 of 6