Record-breaking Investment in African Climate Technology Startups Marks New Peak
In a striking shift, Africa's Climate Tech sector has overtaken the fintech sector in terms of total funding raised in 2024. As of May, climate tech startups in Africa have secured a substantial $325 million, according to the latest Big Deal report. The report suggests that while the Climate Tech sector is poised for continued growth in 2024, overall investment has been declining compared to previous years. This trend is largely attributed to a significant decline in funding within the fintech sector. Logistics & Transport is the climate tech sub-sector that has received the most funding in 2024, with $215 million. Logistics and transport firms in Africa have also secured $95 million. The Energy & Water sub-sector follows closely behind with $132 million. Tech startups in agriculture and food innovations have received $68 million. Deep tech climate solutions have garnered $10 million in investments. Notable partnerships include collaborations between companies such as TotalEnergies and the African Development Bank with African climate technology startups, aiming to enhance the quality and affordability of battery solutions for electric vehicles. One such partnership is 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 by the end of 2026. Josh Whale, CEO of Ampersand, stated that this partnership is a significant milestone for the company as they continue to deliver sustainable, cost-effective, mass-market EV solutions. The funding for African climate tech startups has grown significantly over the past five years, from $340 million in 2019 to an estimated $1.1 billion in 2023. However, the report suggests that surpassing last year's $1.1 billion investment in Climate Tech seems unlikely at this point. Interestingly, Fintech startups once accounted for more than 50% of the total funding in 2023, but now make up only 22% of the total funding in 2024. African fintech startups have only raised $158 million so far in 2024, a significant decrease from the $852 million raised at the same point last year. Despite these fluctuations, the continued growth and investment in Africa's Climate Tech sector indicate a promising future for sustainable technologies on the continent. The sector's resilience and adaptability in the face of changing funding trends underscore its potential to drive innovation and contribute to a more sustainable future for Africa.
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