African Climate Technology Startups Rise to Prominence in Investment Upsurge
The climate tech sector in Africa is experiencing a significant surge, with investments rising steadily over the past five years. According to a report by startup funding data tracker Africa: The Big Deal, the sector secured $325 million in 2024, a marked increase from the $344 million recorded in 2020 and the $1.1 billion in 2023.
The Logistics & Transport sub-sector within Africa's climate tech sector has been a standout performer, securing 29% or $215 million in funding in 2024. This is followed closely by the Energy & Water sub-sector, which has secured 18% or $132 million. Deep tech climate solutions and tech startups in agriculture and food innovations have also received notable funding, with $10 million and $68 million respectively.
One of the most significant developments in the Logistics & Transport sector is the partnership between Kigali-based EV line Ampersand and Chinese EV manufacturer BYD. This partnership aims to ramp up production of electric motorcycles to more than 40,000 by the end of 2026. The partnership is a significant milestone for Ampersand, as CEO Josh Whale stated, "This partnership is a significant milestone for the company as we remain at the forefront of delivering sustainable, cost-effective, mass-market EV solutions."
The partnership between BYD and Ampersand also includes the introduction of more affordable high-quality battery solutions. This innovation is part of the increased funding in Africa's climate change mitigation sector, enabling innovations such as battery-swapping technology solutions to grow increasingly across the continent.
However, the report outlines that the growth in funding has been uneven. While the climate change mitigation sector appears poised for continued growth in 2024, surpassing last year's $1.1 billion investment seems unlikely at this point. This slowdown in funding can be attributed to a significant decline in funding within the fintech sector. Fintech startups have only raised US$158 million in 2024, making up a mere 22% of the total funding, compared to over 50% at the same point last year.
As a result, African climate change mitigation startups have surpassed fintech startups in terms of funding, securing nearly half of the total funding accumulated so far in 2024. The sector's share of total investments reached 36% in 2023, indicating continued growth.
Despite a notable increase in May, the overall investment in the climate change mitigation sector has been declining compared to previous years. This trend is a concern for industry experts, who are urging continued support for the sector to ensure its continued growth and the realization of its potential to drive sustainable development and combat climate change across Africa.
Read also:
- Prices of transit tickets in Berlin and Brandenburg are on the rise
- Linde Wins Major Engineering Design Contract for Equinor's Low Carbon Hydrogen Project at H2H Saltend, Progressing Towards a Greener Future
- Transportation via roads plays a critical role in India's shift towards clean energy.
- Zigbee and LoRa Low-Power Internet of Things (IoT) Network Protocols: The Revolution in Data Transmission and Networking
