VC Funding for Climate Startups Grows Despite Overall Decline
TLDR
- Climate tech startups in Africa are attracting significant investment, with funding growing from $340 million in 2019 to $1.1 billion in 2023.
- African climate tech firms received 45% of the $325 million raised by startups, with a focus on water and sanitation, renewable energy, carbon removal, and land restoration.
- VCs in Africa are increasingly interested in climate innovation, with a special focus on food production and disaster management.
While global venture capital (VC) funding for startups has been slowing, investment in climate mitigation and adaptation startups continues to rise.
Funding for climate startups grew from $340 million in 2019 to $1.1 billion in 2023, with the sector drawing over $3.5 billion in the last five years.
In the first half of the year, climate tech firms received 45% of the $325 million raised by African startups, per TechCabal data.
Key Takeaways
VCs in Africa see continued potential, with expanding interest in food production and disaster management. Since 2022, the Kenya Climate Innovation Centre has raised over $150 million to support small enterprises in the space. These firms focus on areas like water and sanitation, renewable energy, carbon removal, and land restoration.
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