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
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
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
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 (www.ifc.org)
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.