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 the largest ever startup fund in Africa, Timbuktoo Africa Innovation Fund will commit $350 million of risk-tolerant capital to help attract an additional $650 million from private investors, Eleni Gabre-Madhin, Chief Innovation Officer at UNDP Africa told TechCabal via email. “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,” Gabre-Madhin said at the launch event in Davos.

Timbuktoo will provide financing for accelerators and venture builders from the $350 million, including investments of up to $800 million in venture firms in 8 African countries alongside private partners. These details have not been previously reported.

The funds will “make pre-seed, seed, and pre-Series A investments on an equity basis to startups,” Gabre-Madhin said. In Casablanca, Morocco, funds from Timbuktoo will target tourism and hospitality startups, in Dakar, Senegal it will target edtech. In Lagos, Nigeria, Timbuktoo and its commercial fund partners will focus on fintech startups, while in Accra, Ghana it will focus on agritech. In South Africa, Capetown’s hub will target creatives, with Greentech being the focus in Nairobi, Kenya. The Rwandan hub in Kigali will focus on health tech. Trade, logistics and e-commerce will be the fund’s focus in Cairo, Egypt. The fund will work with local universities to support tech ventures.

Foreign development banks are major contributors to the venture capital African startups have received. Institutions from the International Finance Corporation and the European Investment Bank have backed first-time fund managers in Africa like Ventures Platforms, and Atlantica Ventures. Managers of Boost Africa, a venture capital facility run by the European Investment Bank are currently in the final stages of talks with the European Union over a new €159 million facility, Déborah Vouche, a private equity investment officer at the bank told TechCabal.

Kigali’s rising fortunes as a financial centre

The fund will be managed from Rwanda, a boon to Kigali’s financial centre Ambitions. Established in 2017, Kigali International Financial Centre is the #3 financial centre in Africa, only behind Casablanca in Morocco and Mauritius according to the latest ranking from the Global Financial Centres Index. At the launch event on Tuesday in Davos, Rwanda’s president, Paul Kagame made the first public commitment of $3 million to the fund. 

“The decision to domicile the Timbuktoo Africa Innovation Fund within KIFC reaffirms our attractiveness as an international financial services hub,” Jean Marie Kananura, Chief Investment Officer, Rwanda Finance Limited, the parent company of the Kigali International Centre told TechCabal.

Leading fintech firms like Flutterwave, Chippercash and Onafriq have opened offices in the country and say they plan to make Kigali their payments hub for East Africa.