Africa’s climate startups are poised to gain ground as VC funding changes course.

Many new funds refer to pools designed for climate startups

Venture capital activity Climate tech is heating up in Africa despite a slowdown in global VC funding.

The continent’s climate tech startups have received over $860 million in equity funding, mostly in clean energy technologies, data shows, representing 3.5x growth in macroeconomic headwinds over the past year, making climate Africa’s most funded sector after fintech.

This seems to be just the beginning: The past few months have seen some new funds to invest in the space, indicating that funding for climate tech startups is here to stay.

Pan-African venture capital firm Novastar last week raised more than $200 million for its third fund, the Africa People + Planet Fund, to invest in startups developing agriculture and climate solutions on the continent. At the same time, climate technology capital company Equator announced the first closing of its fund to support seed in the energy, agriculture and mobility sectors. Catalyst Fund’s new climate-focused $30 million kitty has also hit the ground running, and is now investing in startups.

Satgana, a new climate technology firm launched late last year, plans to allocate up to 40% of its funding to “planet-positive” startups in Africa. Other African climate-focused investment vehicles that have recently raised capital include the $250 million Africago Green Fund (AAGF), which closed its second round of fundraising in February, and the Energy Entrepreneurs’ Growth Fund (EEGAF), which raised more than $110 million last year. .

AAGF finances “climate-friendly” projects and counts pay-as-you-go solar providers BBOXX and Solarise as part of its portfolio. Similarly, the Shell-backed EEGF fund will invest in startups that will increase access to clean and reliable energy for households and businesses across the continent. Oxfam Novib and Goodwell have launched a new fund to provide venture debt to start-ups in this space.

The rise of many new funds shows that even in the face of capital’s crisis, there will be a pool of founders who can build startups that lead energy-transition efforts and provide solutions to mitigate the effects of climate change. The timing of the funding could not have been better.