💚 A pocket full of pretty green
Climate Tech represents 45% of all start-up funding in Africa in 2024 so far
In 2024 so far, start-up funding in Africa is not quite what it was in previous years, in line with a global context that remains quite gloomy. One of the key reasons is that significant drop in investments in the Fintech space. Indeed, Fintech only represents 22% ($158m) of the funding raised this year so far in Africa, while at the same time last year, it made up more than half of the total ($852m out of $1.7bn). The consequence is that the sector that’s attracted most funding in 2024 so far is not Fintech but Logistics & Transport (29%, $215m); and Energy & Water is a not-so-distant third (18%, $132m).
But what’s particularly interesting is to look at the proportion of funding that is going to ventures than can be considered as ‘Climate Tech’. Climate Tech is not so much a ‘sector’ per se as it covers a wide range of use cases, so we instead track Climate Tech investments as an additional layer:
Climate Tech represents 45% of the funding announced on the continent this year so far ($325m), an all-time high since we’ve been tracking these numbers in 2019. While Climate Tech funding has been growing in absolute numbers in the past 5 years ($340m in 2019, $344m in 2020, $613m in 2021, $959m in 2022 and $1.1b in 2023), the investment boom in 2021 and 2022 did not benefit this space as much as other (such as Fintech), resulting in a drop in its share of total investments: from 25% in 2019 and 32% in 2020 to 14% in 2021 and 21% in 2022. This share started to pick up again in 2023 (36%) and seems on track to grow again in 2024 (45% so far), despite the fact that topping last year’s $1.1b invested in Climate Tech seems unlikely at this stage.
Maxime and I are both passionate about this topic: if you’re a Climate Tech start-up in Africa looking for early-stage funding, you should check out The Catalyst Fund (for investments) and the GSMA Innovation Fund (for grants; future rounds to be announced). And if you want to run your own analysis on Climate Tech funding, you will find a very handy tag in our database (use this discount code) to allow you to do just that. A bientôt, Max
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What has been the impact of investments in the climate sector? Is it more than just hype? What is the impact assessment of the startups in the climate space, how is their impact being measured? Given that 45% of funding this year has already been directed towards Climate Tech, I am curious to know your thoughts on what is driving this surge besides the immediate environmental damage we are causing in our linear economic model ? Additionally, I'd love to understand the breakdown of these investments between mitigation and prevention efforts.
I run a startup, Green Solutions, that focuses on the mitigation of plastic waste. We enable a circular economy by connecting recyclers, collectors, and upcycling startups to producers, converting plastic waste into measurable plastic credits. Producers can reduce their plastic footprint by investing in these credits. Our tracking & traceability system ensures accountability and provides a steady income stream for those managing plastic waste.