Washington D.C., June 2, 2003—
The International Finance Corporation (IFC), the private sector arm of the World Bank Group, has closed a US$3 million round of equity financing in Novica, a leading global e-commerce company that links artisans in developing countries with international markets. The round includes investments from both new and existing shareholders and marks IFC's first investment in an e-commerce company.
Novica is a private, venture capital-backed company founded in 1998 with the mission to provide business opportunities to artisans in developing economies and actively promote traditional cultures and skills. Novica works directly with more than 1,800 artisans and artisan groups through its offices in Peru, Indonesia, Thailand, Mexico, India, Brazil and Ghana. Novica provides income to approximately 50,000 people in the developing world, including artisans and the family members they support, by sourcing home décor items that it sells directly to wholesale buyers and online retail customers.
The newly raised capital will help Novica to build out its proprietary international infrastructure that includes online, wholesale, and catalog distribution, and help Novica broaden its unique capacity-building programs with individual artisans. Novica streamlines the traditional supply chain, giving buyers a value that they could not otherwise receive. At the same time, Novica lets local artists set their own price, leading to significantly higher incomes than they would receive through other exporters.
"Novica is an excellent example of the kind of innovative company that is using the Internet to link entrepreneurs in the emerging markets with customers in developed countries," said Mohsen Khalil, Director of the World Bank Group's Global Information and Communication Technologies Department. "Novica's corporate mission of selling products profitably while also supporting the cultures that produce the goods is a concrete example of the power of the Internet to improve people's lives."
Foursome Investments, one of Novica’s leading institutional investors, also participated in this round of financing. “Foursome Investments has been a long term supporter of Novica,” said Jim New, Foursome’s Managing Director. “We are pleased to see that other investors recognize the potential of Novica to demonstrate not only a profitable business model but also one that creates genuine benefit to all stakeholder groups involved with the business.”
Novica is also working to link many of its artisans directly to wholesale buyers. An innovative US$200,000 grant from IFC's SME Capacity Building Facility (CBF)—a funding vehicle to stimulate innovative, sustainable, and replicable small and medium sized enterprises in developing countries—has enabled Novica to develop a program to help local artisans scale up and tailor production for large volume orders. By developing the artisans' capability to fulfill larger wholesale orders, Novica aims to become a source of even greater income and employment generation for artisans.
"Our goal is to help artisans around the world grow successful businesses," Novica's CEO Roberto Milk said. "Now, with the IFC's assistance, Novica will become an even greater source of sustainable income and employment generation for these artisans."
In addition to its retail website, Novica sells its home décor and gift items through the websites and catalogs of National Geographic, eBay, and National Public Radio. Novica also sells an exclusive line of “Novica Collection” handmade goods through major U.S. department stores.
The World Bank Group's Global Information and Communication Technologies Department (GICT) promotes the transfer of communications and information technologies to the developing world. The Information Technologies Investments Group (
), part of GICT, is a stage-independent investor with an exclusive focus on building successful information technology businesses in the emerging markets.
), affiliated with National Geographic, is headquartered in Los Angeles, with seven regional offices in Asia, Africa, and Latin America. In addition to the IFC, Novica’s major institutional investors include National Geographic Ventures, Foursome Investments, and Scripps Ventures.
IFC's mission (
) is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses. Since its founding in 1956 through the close of the last fiscal year on June 30, 2001, IFC committed more than $31 billion of its own funds and arranged $20 billion in syndications for 2,636 companies in 140 developing countries. IFC's committed portfolio at the end of FY01 was $14.3 billion.