Grace Ashiru
On Tuesday, a significant announcement was made by the United Nations Development Programme (UNDP), Rwanda, and seven other African nations regarding the initiation of Timbuktoo, a new project designed to inject $1 billion into 1000 African tech startups over the next decade.
Known as the largest startup fund ever in Africa, the Timbuktoo Africa Innovation Fund plans to provide $350 million in risk-tolerant capital to attract an additional $650 million from private investors. Eleni Gabre-Madhin, the Chief Innovation Officer at UNDP Africa, communicated through an email to TechCabal the fund’s aim to increase the appeal for domestic capital to enter at earlier stages. During the launch event in Davos, Gabre-Madhin emphasized the need for venture capital in Africa to embrace greater risks.
Timbuktoo has announced plans to allocate $350 million for the support of accelerators and venture builders, along with investments reaching up to $800 million in venture firms across 8 African nations, in collaboration with private partners. These specific aspects of the plan were not previously disclosed.
According to Gabre-Madhin, the funding will be directed towards startups at various stages, including pre-seed, seed, and pre-Series A, through equity investments. In different African cities, the funds will have specific focus areas. In Casablanca, Morocco, the emphasis will be on startups in the tourism and hospitality sector. Dakar, Senegal will see investments in edtech startups, while in Lagos, Nigeria, the focus will be on fintech startups. The fund will concentrate on agritech in Accra, Ghana. In South Africa, Capetown’s hub will be dedicated to the creative sector, Nairobi, Kenya will see a focus on Greentech, and the hub in Kigali, Rwanda will specialize in health tech. Lastly, the fund’s efforts in Cairo, Egypt will be centered around trade, logistics, and e-commerce. Additionally, Timbuktoo plans to collaborate with local universities in these regions to bolster tech ventures.
Venture capital for African startups has seen significant contributions from foreign development banks. The International Finance Corporation and the European Investment Bank have supported new fund managers such as Ventures Platforms and Atlantica Ventures. Boost Africa, a venture capital initiative led by the European Investment Bank, is nearing the conclusion of discussions with the European Union for a new €159 million facility, as disclosed by Déborah Vouche, a private equity investment officer at the bank, in a conversation with TechCabal.
Jean Marie Kananura, the Chief Investment Officer of Rwanda Finance Limited, which is the parent company of the Kigali International Centre, stated to TechCabal that choosing KIFC as the home for the Timbuktoo Africa Innovation Fund underscores the center’s role as a premier global hub for financial services. Prominent fintech companies such as Flutterwave, Chippercash, and Onafriq have established their offices in the nation, intending to use Kigali as their central hub for payment operations in East Africa.
