Timbuktoo: A $1 Billion Investment in African Tech Startups
On Tuesday, the United Nations Development Programme (UNDP), Rwanda, and seven other African countries announced the launch of Timbuktoo, an initiative that hopes to invest $1 billion over 10 years into 1000 tech startups across Africa. Touted as the largest ever startup fund in Africa, Timbuktoo Africa Innovation Fund aims to provide financing and support to accelerate the growth of the tech ecosystem on the continent.
Timbuktoo Africa Innovation Fund to Inject $350 Million into African Startups
Timbuktoo Africa Innovation Fund, as part of its $1 billion investment, will commit $350 million of risk-tolerant capital to attract an additional $650 million from private investors. Eleni Gabre-Madhin, Chief Innovation Officer at UNDP Africa, stated that the fund aims to make it more attractive for domestic capital to invest in early-stage startups, as venture capital in Africa needs to take on more risk. The fund will finance accelerators and venture builders, along with making investments of up to $800 million in venture firms across eight African countries, in collaboration with private partners.
Timbuktoo’s Regional Investment Focus: Boosting Tech Sectors Across Africa
Timbuktoo Africa Innovation Fund will focus on specific tech sectors in various African cities. For instance, in Casablanca, Morocco, it will target tourism and hospitality startups, while in Dakar, Senegal, the focus will be on edtech. In Lagos, Nigeria, the fund will prioritize fintech startups, and in Accra, Ghana, it will support agritech. Other areas of focus include creatives in Cape Town, South Africa, health tech in Kigali, Rwanda, greentech in Nairobi, Kenya, and trade, logistics, and e-commerce in Cairo, Egypt. The fund will coordinate with local universities to provide support for tech ventures.
Foreign Development Banks Back African Startups as Timbuktoo Launches
Foreign development banks have been significant contributors to venture capital funding for African startups. Institutions such as the International Finance Corporation and the European Investment Bank have supported first-time fund managers in African countries. For instance, Ventures Platforms and Atlantica Ventures have received backing from these banks. Boost Africa, a venture capital facility run by the European Investment Bank, is also in talks with the European Union regarding a new €159 million facility. This support from development banks has played a crucial role in the growth of the African startup ecosystem.
Kigali as a Rising Financial Center: Timbuktoo Africa Innovation Fund to be Managed in Rwanda
The Timbuktoo Africa Innovation Fund will be managed from Rwanda, further strengthening Kigali’s rising status as a financial center. The Kigali International Financial Centre (KIFC) was established in 2020 and is currently ranked as the third-largest financial center in Africa, behind Casablanca in Morocco and Mauritius. Rwanda’s President, Paul Kagame, announced a commitment of $3 million to the fund, demonstrating the country’s dedication to supporting the growth of the tech ecosystem. Leading fintech firms like Flutterwave, Chippercash, and Onafriq have already established offices in Kigali, with plans to make it their payments hub for East Africa. The decision to manage the Timbuktoo Africa Innovation Fund in Kigali further establishes the city’s attractiveness as an international financial services hub.
Analyst comment
Positive news. The launch of Timbuktoo Africa Innovation Fund and its $1 billion investment in African tech startups is expected to have a significant positive impact on the market. The injection of capital will accelerate the growth of the tech ecosystem in Africa, attract additional private investors, and make domestic capital more willing to invest in early-stage startups. The fund’s focus on specific tech sectors in various African cities and its coordination with local universities will provide targeted support for tech ventures. Additionally, the decision to manage the fund in Kigali further strengthens the city’s rising status as a financial center.