We’ve written about i/o Ventures in San Francisco and its glitzier cousin in LA. The newest venture by i/o co-founder Paul Bragiel and i/o entrepreneur-in-residence Mbwana Alliy is significantly different.

Today, at a conference in Nairobi, they are launching the first Sub-Saharan African Incubator and Accelerator, called the Savannah Fund. Bragiel and Alliy are general partners in the fund along with Erik Hersman, a Nairobi-based technologist and blogger, who co-founded Ushahidi, a powerful open source platform for crowdsourcing information. Alliy and Hersman are both based on the ground in Nairobi where they’ll be hands on mentoring very early stage companies.

This has been no trivial undertaking. Bragiel and Alliy have talked about putting together an African incubator for years. They first tried starting an incubator in Alliy’s home country of Tanzania. That didn’t work out, so the two shifted their efforts towards Kenya, which has become the de facto tech hub in Sub-Saharan Africa. The world has been agog at the runaway success of mobile payment wonder child M-PESA which processes more than 25 percent of Kenya’s GDP.

Africa is nascent — no doubt. Many investors don’t have the stomach for China or Brazil, and Africa is considered even dicier. But it is also the fastest growing consumer market in the world with a 300 million person middle class. And there’s some $40 billion being invested in the country’s wireless infrastructure over the next five years. It’s not just Western countries investing; more developed emerging markets have been aggressively going after their own growth opportunities in the country.

There is a clear void of angels in Kenya — like most emerging countries. Alliy came to a startup competition in Nairobi a year ago and was disappointed that all the judges were either private equity guys or private equity guys who called themselves VCs. They were asking all the wrong questions and couldn’t write checks smaller than $1 million, even if they’d been interested in the companies they saw. It became clear that Kenya needed an i/o, and the timing was now.

A lack of angels is a common gripe with many emerging markets — not to mention plenty of cities in the Western world. The difference was Alliy, Bragiel, and Hersman’s determination to do something about it. Alliy pitched some 200 investors between September and January of last year. He found that the ones who had no connection to Africa had little interest.

But a handful did have a connection to Africa, and the approach resonated with them. So far Savannah Fund has commitments from Tim Draper, Dave McClure of 500 Startups, Yelp co-founder Russ Simmons, and Dali Kilani and Roger Dickey of Zynga. It has also secured commitments from local Kenyan entrepreneurs, like Karanja Macharia of Mobile Planet, who wanted to angel invest but had been intimidated by doing it alone.

Alliy expects that they’ll end up raising as much from local Kenyans as from foreigners, which is a good sign that the country will embrace their efforts, they’ll have the buy in of local mentors, and it will be more sustainable.

The goal is to raise a $10 million fund, and Savannah Fund is starting to invest now. The fund plans to have several components. It will run an incubator like i/o in San Francisco, where ten companies a year get basic funding and hands on mentoring to build a product. That’ll take up about $1 million per year. Another $3 million will go towards follow on investments in the ones that survive. Another $3 million will go towards more mature startups that haven’t gone through the accelerator, hopefully from East Africa more broadly. That will leave another $3 million or so for reserves.

$10 million is a pretty big chunk of money for such an unproven market, and Alliy doesn’t expect typical venture style returns. There’s not much of an IPO market in Africa, so they’ll look for exits other ways. The partners are confident that more multinationals will start doing acquisitions in Africa as the market continues to grow. Aside from that there are a raft of private equity players looking for profitable tech companies to invest in. They won’t invest in early stages but may well provide liquidity once companies get farther along.

A third option is a revenue-based financing loan. Under this structure, the firm would invest as a loan at a fixed percentage of revenue. If there’s no revenue, the firm gets nothing; if it makes $100,000, the firm may get 3 percent or so of that.

Each of these paths still depend on a largely unproven entrepreneurial class defying the odds. But at least Savannah Fund’s partners have thought through the liquidity challenges. It’s an impressive start and one many emerging markets would be jealous of. If it works, it could become a model for foreign investors who have their own ties to burgeoning frontier markets they’d like to invest in.