UN-backed fund looks to invest $1bn in African startups
TLDR
- UNDP and eight African countries launch Timbuktoo, a $1 billion initiative to invest in 1000 tech startups in Africa
- Timbuktoo's Africa Innovation Fund plans to allocate $350 million of risk-tolerant capital to attract $650 million from private investors
- The initiative aims to make early-stage investments more appealing and foster innovation, entrepreneurship, and economic development in Africa.
The United Nations Development Programme (UNDP) and eight African countries, including Rwanda, have joined forces to unveil Timbuktoo, an initiative aimed at investing $1 billion over the next decade into 1000 tech startups across the continent.
Described as the largest-ever startup fund in Africa, the Timbuktoo Africa Innovation Fund plans to allocate $350 million of risk-tolerant capital to attract an additional $650 million from private investors. Eleni Gabre-Madhin, Chief Innovation Officer at UNDP Africa, emphasized the initiative's objective to make early-stage investments more appealing for domestic capital, acknowledging that venture capital in Africa needs to embrace higher levels of risk.
The launch of Timbuktoo signals a collaborative effort to foster innovation, entrepreneurship, and economic development across the African continent, positioning it as a significant player in the global tech ecosystem.
Key Takeaways
Africa currently holds a mere 0.2% share of global startup value, contrasting sharply with its 2% share of global trade value. The landscape further reveals that 89% of venture capital entering Africa is foreign, with 83% concentrated in just four countries: Nigeria, Kenya, South Africa, and Egypt. Additionally, over 60% of this capital flows into the fintech sector. The Timbuktoo initiative, launched by the UNDP in collaboration with eight African countries, aims to address these disparities. The initiative adopts a pan-African approach to support startups while also focusing on the entire ecosystem. This involves fostering connections between government policy, universities, corporates, development partners, catalytic partners, and commercial investors, thereby promoting a comprehensive and collaborative strategy for sustainable economic development across the continent.
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