A climate change technology startup bucked the trend in Africa’s venture capital space, aggressively posting a staggering $1 billion in revenue in 2023 amid a broader decline in funding.
Data tracker Africa: The Big Deal notes that approximately $1 in every three dollars invested in startups on the continent went into climate change technology startups during the forecast period.
According to the agreement, the strength of the sector demonstrates “both the potential for ‘green’ investing in Africa and the increasing attention of investors to this sector.”
“While energy and water startups dominate, agtech dominates the early-stage pipeline, also pointing to the need for further innovation across diverse sectors that need to adapt to climate impacts. Masu.”
Investor interest in regional climate technologies reflects the findings of the 2023 Africa Climate Awareness Report published by Bird Story Agency, which shows a growing trend among the public for cleaner solutions. It is shown that there is.
Africans showed a strong preference for green solutions such as solar power and electric vehicles, which are gradually entering the market, especially in Kenya, Nigeria, South Africa, Egypt and some Maghreb countries.
Tracking by Partek Africa found that African tech startups raised a total of $3.5 billion in funding (combined equity and debt) across 547 deals, down 46% year-on-year. .
Despite a 22% decline in total procurement by the climate technology sector between 2022 and 2023 (from $1.6 billion to $1.2 billion), the number of debt transactions in the sector still recorded a slight increase. (From 71 cases in 2022 to 74 cases in 2022). 2023.
Part of the sector’s resilience is the availability and diversification of funding sources, including impact investors, development finance institutions, corporate venture capitalists, and philanthropic organizations keen to support climate technology startups.
Additionally, the emergence and innovation of new business models and technologies, such as pay-as-you-go, make these startups more bankable, and artificial intelligence and the Internet of Things allow them to scale and reach more customers. It is now possible.
Late last year, several African climate technology startups were featured in the inaugural Google for Startups Accelerator. We provided energy, agriculture, and transportation solutions using data, AI, and clean energy.
These include NeedEnergy, a Zimbabwean startup that uses data intelligence to deliver smart, clean energy solutions; Includes startup Octavia Carbon.
Others include Seabex, a Tunisian startup with an AI-driven sensorless precision irrigation solution that provides farmers with actionable insights for growing water-efficient crops; These include SolarTaxi, a Ghanaian startup that offers locally assembled electric vehicles to promote. .
Support for African climate technology companies is also expanding internationally. At COP27, several United Nations agencies launched a program to stimulate new capital flows into climate change technologies to help African countries harness and build renewable energy systems to power their economies.
Climate change technology is seen as a key element in Africa’s accelerated transition from high-polluting industries to an energy transition that embraces clean resources and aligns with the 1.5-degree target.