Climate tech leads Africa’s startup funding, capturing 45% of investment in 2024

A report by the African Tech Startup Analytics Company, Africa the Big Deal, has revealed increasing funding towards innovators in the technology space.

According to funding numbers for 2024 so far, as reported by Technext24, African climate tech startups have raised US$325 million.

This amount represented 45 percent of the total US$721 million raised by tech startups on the continent so far, marking an all-time high for the climate tech sector.

This makes the sector the most funded so far in 2024, surpassing the financial technology sector, which attracted only US$158 million, or 22 percent of the total.

“In 2024 so far, start-up funding in Africa is not quite what it was in previous years, in line with a global context that remains quite gloomy. One of the key reasons is the significant drop in investments in the Fintech space.

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Indeed, Fintech only represented 22 percent (US$158 million) of the funding raised this year so far in Africa, while at the same time last year, it made up more than half of the total (US$852 million out of US$1.7 billion),” the report noted.

Even though the funding boom of 2021 and 2022 did not favor the sector as much, climate tech funding has witnessed continuous and consistent growth over the years. This contrasts sharply with financial technology, which has seen dwindling numbers since 2023.

Funding in the climate tech sector grew from US$340 million in 2019 to US$344 million in 2020.

This number further rose to US$613 million in 2021, US$959 million in 2022, and US$1.1 billion in 2023.

Despite this growth, there had been a significant decline in the total share of investments in tech startups on the continent.

“The investment boom in 2021 and 2022 did not benefit this space as much as others (such as Fintech), resulting in a drop in its share of total investments: from 25 percent in 2019 and 32 percent in 2020 to 14 percent in 2021 and 21 percent in 2022.

This share started to pick up again in 2023 (36 percent) and seems on track to grow again in 2024 to 45 percent so far,” the report stated.

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