Equator Africa, a venture capital firm focusing on the African climate sector, has successfully secured an additional $5 million in funding from the International Financial Corporation (IFC). This infusion of capital is intended to bolster businesses and foster innovation within the African climate technology landscape. This latest funding round follows an initial $40 million secured in April 2023, which was aimed at addressing the significant funding shortfall faced by climate tech innovators, particularly those at the seed and Series A stages in sub-Saharan Africa.
The fund’s final investment includes a $1.5 million guarantee from the Korea Green Resilient and Innovative Development (K-GRID) Programme, an initiative backed by the Korean government with a $30 million commitment to support IFC projects that aim to cut emissions and advance climate mitigation technologies. With this guarantee, the total fund size has reached $54 million.
Farid Fezoua, the IFC’s Global Director for Disruptive Technologies, Services, and Funds, has expressed enthusiasm about the potential of climate technology in Africa. He noted that businesses in this sector are not only driving economic growth but are also contributing to the reduction of emissions and more efficient resource utilization. Fezoua emphasized the IFC’s dedication to supporting these businesses, which are developing solutions across various domains, including renewable energy and electric vehicles.
Equator Africa’s investment strategy targets early-stage, tech-driven companies in Sub-Saharan Africa that are innovating in areas such as green energy, agriculture, and mobility. While the fund has a primary focus on Kenya and Nigeria, it has also extended its reach to companies in other African countries, including Côte d’Ivoire, Ghana, Madagascar, Senegal, Sierra Leone, South Africa, and Zambia.
To date, the fund has made investments in six companies. Among them is SunCulture from Kenya, which specializes in solar-powered energy and irrigation systems for farmers, and Roam, also based in Kenya, which designs electric motorcycles and buses.
Other beneficiaries include Odyssey, a data and technology platform for investment and asset management in distributed renewable energy infrastructure; Apollo Agriculture, a Nairobi-based tech company providing services to smallholder farmers; Ibisa, which offers parametric insurance products for climate risks; and Downforce Technologies, which is dedicated to making soil organic carbon measurement technology both accessible and affordable.
Data from Africa, The Big Deal, a startup funding tracker, reveals that African climate tech startups have amassed $325 million in funding in 2024 alone. Over the past five years, climate tech funding has seen a remarkable surge, escalating from $340 million in 2019 to $1.1 billion in 2023. Despite the substantial increase in funding for climate ventures, reports suggest that the current levels are still not adequate to achieve Africa’s climate goals by 2030. To meet both mitigation and adaptation requirements, annual climate funding needs to soar from $30 billion to nearly $300 billion.
Recent trends, however, show a promising trajectory for the African climate tech sector. In March 2024, Satgana, a venture capital firm, closed its first fund dedicated to supporting early-stage climate tech startups in Africa. Additionally, the African Development Bank Group (AfDB) has pledged a $10 million junior equity investment in the KawiSafi II Fund, further bolstering support for climate tech startups on the continent.
