3 Nov 2024
Africa faces urgent climate challenges, but it also holds huge potential to lead with climate-smart innovations that boost livelihoods and grow economies.
From solar-powered storage for smallholder farmers to cutting-edge carbon removal, African entrepreneurs are reimagining key sectors and creating real investment opportunities.
At the heart of this transformation is Catalyst Fund, an Official Nominator to The Earthshot Prize. Their venture capital fund backs early-stage climate tech startups in Africa. Through capital, tailored venture building support, and network access, Catalyst Fund empowers innovators like 2024 Earthshot Prize Winner Keep IT Cool to scale breakthrough solutions across climate adaptation, food security, waste management and more.
Catalyst Fund’s work with startup founders, coupled with data from Africa: The Big Deal have been helping The Earthshot Prize identify promising solutions and better understand the African investment landscape since 2023.
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Below, Ken Ngetha, Venture Building Engagement Lead & Maelis Carraro, Managing Partner from Catalyst Fund, share insights into Africa’s climate startup scene and the latest investment trends.
Today, Africa receives about $30 billion annually in climate financing, but needs around $280 billion annually by 2030 to cover both mitigation and adaptation efforts. With only 14% of current finance coming from the private sector, there is significant room for growth.
To attract more investment, especially for African climate-tech startups that often need up to three years of soft capital before securing pre-seed funding, a diversification of funding sources – from grants to equity and debt – and blended finance strategies is essential. These strategies can draw in more private investment, reduce risks, and accelerate local climate action.
Investor interest in African climate-tech is growing fast. In 2024, climate-tech companies secured a third of all funding that went to ventures in Africa (Africa: The Big Deal).
According to Catalyst Fund’s Investor Pulse survey from August 2024, over 60% of respondents have been investing in African climate-tech for one to three years. This growth is often in small deals, half of which are valued at less than $500,000, yet the quality of the solutions in the pipeline is evident, with nearly a third of investors closing four to six deals in the prior 12 months.
The growing focus on climate investments is driven by an ever increasing awareness of the opportunities available, as well as pressure from development finance institutions and limited partners to allocate more resources to climate-tech. It’s also clear that the quality of investment opportunities in Africa is improving year on year, making the continent an attractive destination for climate capital.
Bekia in Egypt is supported by The Catalyst Fund. Their app helps businesses and individuals exchange waste for a financial incentive. Pictured: Bekia CEO Alaa Afifi. Photo: Rehab Eldalil.
Bekia has facilitated the collection and recycling of 1,000+ tons of waste since 2020. Photo: Rehab Eldalil.
In 2023, Catalyst Fund found that nearly 75% of funding for climate-tech start-ups went to energy and water organisations.
But the landscape is changing fast, with many other exciting areas of innovation gaining traction. Mobility, climate-smart agriculture, and carbon capture are now the top three areas of investor focus, while interest in climate data analytics is also surging.
These trends show a growing belief in the potential of African innovation to drive impact across multiple sectors. As the quality of solutions continues to rise, so does Africa’s prominence in the global climate-tech conversation.
Catalyst Fund’s strategic support empowers early-stage startups to scale climate-smart solutions that improve livelihoods and tackle urgent challenges, like food loss and post-harvest waste. This helps to strengthen the pipeline for follow-on investors and build confidence in African markets.
One standout example is Keep IT Cool, winner of the 2024 Earthshot Prize in the ‘Build a Waste-Free World’ category. Their affordable cold storage units help smallholder farmers and food businesses preserve perishables, reducing food waste and related emissions while boosting incomes. Catalyst Fund has supported Keep IT Cool since 2023, across a number of areas from marketing, to business strategy and fundraising. This journey has led them to follow-on funding from other prominent investors like Acumen, Global Innovation Facility and more.
Zebra CropBank is supported by The Catalyst Fund. Their post-harvest platform helps farmers store, manage, and monetize their produce. Photo: Rukaiya Ibrahim.
Francis Nderitu, Founder of Keep IT Cool shows plans for new solar-powered refrigeration hub to Earthshot Prize Council Member Wanjira Mathai.
Similarly, Zebra CropBank in Nigeria is tackling post-harvest waste with solar-powered micro-warehouses placed near farm clusters. Their integrated platform helps farmers store crops and access fairer markets, increasing incomes by up to 90% while building food security and climate resilience. Catalyst Fund’s support has enabled Zebra Cropbank to secure funding from additional partners, such as Elea Foundation, and improve their digital platform product.
These ventures show, in practical terms, how Catalyst Fund’s mix of tailored investment, venture building support, and strategic networks helps early-stage businesses scale innovations that deliver measurable climate benefits while driving inclusive economic growth.
Catalyst Fund remains bullish on the potential of climate-tech in Africa, particularly in adaptation and resilience solutions that address urgent needs while unlocking economic growth.
To date, the fund has backed 24 startups and plans to add 16 more to our portfolio by 2026. Several investees are already securing follow-on rounds, signalling both strong performance and growing investor appetite.
While the fund remains optimistic about this progress, they’re also mindful that much more capital and innovation must be unlocked by 2030 to build on this momentum and ensure African countries can meet their climate goals.
If this growth and investment comes to fruition, then we will see climate resilience becoming one of the biggest growth markets in Africa’s future economy.
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Learn more about Catalyst Fund’s climate investment work on their website.
