Mediterranean Innovation Funds
Morocco, the state with astonishing deserts just right next to France seems to face certain difficulties with the implementation of their Moroccan Innovation Strategy that was set out in 2009. Meeting the objectives from the strategy became a struggle for proper funding.
In 2009 Morocco defined the goals to make 1000 patents which was supposed to encourage the development of start-up companies, 200 of them to be precise until 2014. As it turns out, it is easier said than done. The Office of Industrial and Commercial property received only 207 of these patent applications. Despite the deficit, Morocco still ranks well on the global scene by the global innovation index. It occupies the 78th position.
Funding is hard to get and slow since the administration procedures are rather complex with the Moroccan Innovation Center which keeps loan and funds out of reach for the majority of potential business innovators. Moreover, the Center has only secured funds for 50 companies, and after that, it stopped its funding activities last year.
Moroccans can only count on bank loans and loans from Réseau Entreprendre Maroc Association since these are the only two entities that issue loans. It is clear that funds for innovations are not a priority of the Moroccan Government, whereby most funds are allocated to the industrial and scientific sector. Only the modest Maroc Numeric Fund (MNF) targets innovation whereby it grants 35% ownership to the state.
The innovative sector remains somewhere in the gray zone in this arrangement. Innovation is put on the margin since only the Morocco Incubation and Spin-off Network gives support to innovation start-ups. They offer to support up to 20,980 euros. Projects related to renewable energy are somewhat better off with the Research Institute for Solar Energy and Renewable Energies (IRESEN) which secured 4.5 million euros for projects that are based on cooperation between universities and the industrial sector.
Regional Operators and Star-Ups and MNF
The MNF was supposed to provide resources for start-up companies, but yet it ended up funding only companies which are already in the business for several years and are acknowledged on the market. An alternative for start-ups could be to turn to regional operators for funding. Some of the regional operators are Oasis 500, Flat6Labs, Wamda Capital, etc. These operators are currently playing a major role in innovation funding since their aim is to invest in different innovation projects.
Wamda Capital, for example, managed to ensure a $75 million investment fund, which makes it the largest fund in the MENA region (The Middle East and North Africa, a region that counts 22 countries). The Wamda Fund established successful cooperation with some of the best-known international investors like the World Bank and International Finance Corporation (IFC).
The Mediterranean Innovation funds, like the Mediterranean Capital Partners, are supporting small and medium size enterprises which are either in the business or just emerging in the market. They rely on international donors, and the Moroccan and Mediterranean countries have easier access to funding since administration procedures are faster and not costly.
Project holders who were struggling for financial support and could not come through the complicated application process were given the opportunity to implement their projects with the assistance of innovation funds which became the new trend in supporting start-ups.
Morocco might not only face troubles with financing but also lack appropriate expertise and sufficient entrepreneurs when it comes to innovation. Even though it appears that the start-up development is booming in the country, many companies are struggling to move from the incubation stage to a real business. Still, Morocco remains hopeful and thinks it has a bright future in the innovation world, and that with time and experience, more companies will be added to the network.