African Climate Technology Startups Soar High in Investment Upswing
In a remarkable turn of events, Africa's climate change tech sector has outpaced the fintech sector in terms of funding this year. As of now, African climate change tech startups have garnered an impressive US$325 million, surpassing the US$158 million raised by fintech startups.
The surge in funding for climate change tech startups is particularly noticeable in May 2024, with investments marking a 149% increase compared to the funds raised by tech startups in April. The Energy & Water sub-sector within Africa's climate change tech sector has secured 18% or $132 million in funding in 2024, while the Logistics & Transport sub-sector has received 29% or $215 million.
Notably, climate change tech startups have surpassed fintech startups in terms of funding, securing nearly half of all funding accumulated so far in 2024. This shift is a testament to the growing importance of climate change tech solutions in Africa.
Tech startups in agriculture and food innovations have also received US$68 million in funding, contributing to the sector's growth. However, it's worth noting that the sector's overall investment has been declining compared to previous years, according to the Big Deal report. The report suggests that surpassing last year's $1.1 billion investment in Climate Change Tech seems unlikely at this point in 2024.
One of the significant developments in the sector is the partnership between Chinese EV manufacturer BYD and Kigali-based EV line Ampersand. The partnership aims to ramp up production of electric motorcycles to more than 40,000 units by the end of 2026, with a focus on enhancing their quality and introducing more affordable high-quality battery solutions.
Deep tech climate change solutions in Africa have also received US$10 million in funding, indicating a growing interest in sustainable technologies. However, as of 2024, there are no specific records indicating which companies or organizations have financially supported the development of battery swapping technologies for electromobility in Africa.
The Big Deal report attributes the slowdown in funding to a significant decline in funding within the fintech sector. Despite this, the climate change tech sector's share of total investments reached 36% in 2023, and over the past five years, funding for climate change tech in Africa has increased significantly, from $340 million in 2019 to $1.1 billion in 2023.
In conclusion, the shift towards climate change tech in Africa is evident, with the sector surpassing fintech in terms of funding this year. As the continent continues to invest in sustainable technologies, we can expect to see more innovative solutions that address climate change and contribute to a greener future.
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