The United Nations Development Programme (UNDP) has launched a $1 billion innovation fund aimed at supporting startups across Africa.

Tagged the “timbuktoo Africa Innovation Fund”, the initiative was launched together with African countries’ leaders during a special session of the ongoing World Economic Forum in Davos, Switzerland.

President Paul Kagame of Rwanda, President Nana Akufo-Addo of Ghana, the Secretary General of the African Continental Free Trade Area Secretariat, Wamkele Mene, and UNDP Administrator Mr Achim Steiner presented the initiative, which is positioned to be the world’s largest financing facility bringing catalytic and commercial capital together to support Africa’s startup ecosystem.

Attended by global corporate leaders, as well as African financial institutions, the occasion marked what is considered a major step in sparking the African Startup Revolution, harnessing the momentum of Africa’s major youth demographic and abundance of innovative talent.

Rwanda contributes $3 million

According to a statement from the UNDP, Rwandan President, Paul Kagame, during the launch announced an immediate contribution of $3 million to start the ‘timbuktoo’ Africa Innovation Fund which will be hosted in Kigali.

The Fund

Promoted by the UNDP, timbuktoo aims to address critical gaps and work with African governments, investors, corporates, and universities, to support the African startup ecosystem.

“timbuktoo is a new model of development. We are gathering key actors to push on all fronts at the same time. From startup-friendly legislation, global-class startup building, and de-risking capital to increase investment, to the UniPods – University Innovation Pods – across Africa, we aim to fill critical gaps and support the startup ecosystem. This will enable innovations to grow and benefit people in Africa and elsewhere on the planet,” said UNDP Administrator, Achim Steiner.

Currently, Africa’s share of global startup value stands at just 0.2%, compared to 2% of global trade value. The vast majority, 89%, of venture capital coming into Africa is foreign capital and 83% is concentrated in four countries: Nigeria, Kenya, South Africa, and Egypt, with over 60% of capital flowing to one sector, fintech.

According to the UNDP, timbuktoo’s ambition is to mobilize and invest $1 billion of catalytic and commercial capital to transform 100 million livelihoods and create 10 million dignified new jobs.

It added that what makes timbuktoo unique is its design, which blends commercial and catalytic capital to de-risk private investment, with a pan-African approach to supporting startups, while also focusing on the whole ecosystem, engaging and deepening the linkages between government policy, universities, corporates, development partners, catalytic partners, and commercial investors.