African local weather startups set to realize floor as VC funding shifts their manner
A slew of recent funds point out potential for devoted swimming pools for local weather startups
Enterprise capital exercise round local weather tech has been heating up in Africa regardless of the worldwide VC funding cooldown.
The continent’s local weather tech startups secured over $860 million in fairness funding, largely pushed by clear power applied sciences, representing 3.5x progress amid macroeconomic headwinds final yr, data shows, making local weather Africa’s most funded sector after fintech.
This appears to be just the start: The previous few months have seen a slew of recent funds devoted to investing within the area, indicating that funding for local weather tech startups will persist for some time.
Pan-African enterprise agency Novastar was last week reported to be raising over $200 million for its third fund, Africa Folks + Planet Fund, which can put money into startups growing agriculture and local weather options on the continent. Across the similar time, climate tech venture capital firm Equator announced the initial close of its fund to again seed and Sequence A startups within the power, agriculture and mobility sectors. Catalyst Fund’s new climate-focused $30 million kitty has additionally hit the bottom operating and is now investing in its first cohort of startups.
Satgana, a brand new local weather tech agency launched late final yr, plans to allocate as much as 40% of its funds in “planet-positive” startups in Africa. Different African climate-focused funding autos which have raised capital lately embrace the $250 million AfricaGoGreen Fund (AAGF), which closed the second tranche of its fundraise in February, and the Energy Entrepreneurs Growth Fund (EEGF), which raised over $110 million final yr.
The AAGF funds “climate-friendly” initiatives and counts pay-as-you-go photo voltaic suppliers BBOXX and Solarise as a part of its portfolio. Equally, the Shell-backed EEGF fund invests in startups that enhance entry to wash and dependable power to households and companies on the continent. Oxfam Novib and Goodwell have additionally launched a new fund to offer enterprise debt to startups on this area.
The rise of so many new funds exhibits that even amid the capital crunch, there might be some devoted swimming pools for founders constructing startups that may lead power transition efforts and supply options to mitigate the consequences of local weather change. The timing of the funding couldn’t be higher.
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