Equator Africa, a venture capital firm, has raised an additional $5 million from the International Financial Corporation (IFC) to support climate-focused businesses and innovation across Africa.
This funding follows an initial close of $40 million in April 2023, aimed at addressing the ongoing funding gap for climate tech innovation, especially for seed and Series A-stage startups in sub-Saharan Africa.
As part of this new funding, the Korea Green Resilient and Innovative Development (K-GRID) Programme, a $30 million initiative by the Korean government, has provided a $1.5 million guarantee. This brings the total fund size to $54 million.
Farid Fezoua, IFC’s Global Director for Disruptive Technologies, Services, and Funds, highlighted the significance of climate technology in Africa. “IFC’s investment in Equator Africa reflects our commitment to supporting those businesses to deliver solutions, from renewable energy to electric vehicles,” he stated.
Equator Africa focuses on early-stage, tech-enabled companies in sub-Saharan Africa, particularly in sectors like green energy, agriculture, and mobility. While primarily targeting Kenya and Nigeria, the firm has also invested in businesses across Côte d’Ivoire, Ghana, Madagascar, Senegal, Sierra Leone, South Africa, and Zambia.
The fund has previously supported six companies, including:
- SunCulture: A Kenyan company providing solar-powered energy and irrigation systems for farmers.
- Roam: A firm designing and developing electric motorcycles and buses.
- Odyssey: A platform for investment and asset management in renewable energy infrastructure.
- Apollo Agriculture: A Nairobi-based tech company offering financing and advisory services to smallholder farmers.
- Ibisa: A provider of parametric insurance products for climate risks.
- Downforce Technologies: Focused on making soil organic carbon measurement technology more accessible.
According to data from Africa, The Big Deal, African climate tech startups have raised $325 million so far in 2024. Over the past five years, funding in this sector has surged, jumping from $340 million in 2019 to $1.1 billion in 2023.
Despite this growth, reports indicate that current funding levels fall short of meeting Africa’s climate targets for 2030. The annual climate funding must increase from $30 billion to nearly $300 billion to adequately address mitigation and adaptation needs.
Recent developments show a positive trend for the African climate tech sector. In March 2024, Satgana, a VC firm, launched its first fund dedicated to early-stage climate tech startups. Additionally, the African Development Bank Group (AfDB) is committing a $10 million junior equity investment to the KawiSafi II Fund to further support climate tech initiatives.
