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The United Nations Development Programme (UNDP) has launched a $1 billion fund for tech startups in Africa.
UNDP launched the Timbuktoo Africa Innovation Fund in collaboration with Rwanda and seven other African countries.
This initiative aims to inject $1 billion into 1000 tech startups across the continent over the next decade, making it the largest startup fund in Africa.
Eleni Gabre-Madhin, Chief Innovation Officer at UNDP Africa, said the fund commits $350 million in risk-tolerant capital, with the goal of attracting an additional $650 million from private investors.
Speaking at the launch event at the World Economic Forum in Davos, Switzerland, Gabre-Madhin explained, “What we’re trying to do is make it more attractive for domestic capital to come in at earlier stages… venture capital in Africa needs to be riskier.”
The Timbuktoo Africa Innovation Fund will allocate funds for accelerators and venture builders from the initial $350 million. This includes investments of up to $800 million in venture firms across eight African countries, working alongside private partners.
Gabre-Madhin highlighted that the fund will make equity-based pre-seed, seed, and pre-Series A investments in startups.
Specific sectors in various African hubs will be targeted, such as tourism and hospitality in Casablanca, Morocco, edtech in Dakar, Senegal and agritech in Accra, Ghana. In Lagos, Nigeria, the focus will be on fintech, while in Cape Town, South Africa, creatives will take centre stage.
The fund aims to support greentech in Nairobi, Kenya. Health tech will be the priority in Kigali, Rwanda, while Cairo, Egypt, will see a concentration on trade, logistics, and e-commerce. Collaborations with local universities will enhance support for tech ventures.
Foreign development banks, including the International Finance Corporation and the European Investment Bank have played a crucial role in supporting African startups. The Timbuktoo Africa Innovation Fund stands out by being managed from Rwanda, specifically from the Kigali International Financial Centre (KIFC).
Rwanda’s president, Paul Kagame, committed $3 million to the fund at the launch event. Jean Marie Kananura, Chief Investment Officer of Rwanda Finance Limited, said housing the fund in KIFC reaffirms Kigali’s status as an international financial services hub.
The Timbuktoo Africa Innovation Fund holds the potential to reshape the African tech landscape, fostering innovation and economic growth across the continent.
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