Kenya has positioned itself at the forefront of Africa’s agri-tech and food startup scene, attracting significant capital for innovation in solar energy and precision agriculture. While foreign investment, particularly from the US and UK, accounts for 60% of the funding, Kenya, alongside Nigeria and South Africa, dominates the local investment landscape.
According to Katapult Africa’s report, these three countries are leading in both the volume and total value of investments in climate and food technologies. Since 2014, over 800 investors have backed African innovators, with multiple investors often pooling for single deals. Venture capital remains the largest funding source, responsible for 29% of investments, but venture debt is rapidly growing, doubling to over $1.1 billion in 2023, showcasing a shift towards more flexible financing options.
Impact investments and corporate funding also play roles, though less significant compared to venture capital. The report highlights a surge in interest in sustainable solutions, predicting a robust future for African climate and food tech, supported by hubs like iHub in Nairobi and Silicon Cape in South Africa.
Nairobi, at the heart of Eastern Africa’s startup ecosystem, has seen over $2.5 billion invested in the last decade, outpacing Western and Southern Africa. The growth trajectory suggests a promising future, with the green bond market and impact investing expected to expand, alongside AI applications in agriculture, aiming to boost food security and productivity.
Infrastructure development remains crucial, with an estimated $100 billion needed to enhance digital and energy networks, setting the stage for broader tech adoption across the continent.