When Priscillah Wakerera and Soinato Leboo founded Rhea in 2022, an agritech startup providing soil testing services to smallholder farmers in Kenya, securing funding was a challenge. At the time, fintech and e-commerce dominated the venture capital scene, leaving climate and agritech startups struggling for attention. Those few that managed to secure funding often faced lower valuations compared to their counterparts in more popular sectors.
Rhea’s mission—collecting and analyzing soil samples to help farmers choose the right fertilizers and seeds—initially went unnoticed. However, the startup gained recognition at the recent AfricaArena Climate Summit in Nairobi, where it won the award for Best Climate Tech Startup.
“Attracting investors was tough because improving soil health wasn’t a mainstream issue. But once we demonstrated progress in our market and aligned with the increasing focus on climate change, impact investing, and agricultural technology, we began to attract more attention from local and international investors,” said Priscillah Wakerera, Rhea’s Co-Founder and CEO.
While overall venture capital funding for startups has been declining, investment in climate mitigation and adaptation technologies has seen steady growth. Since 2019, the sector has attracted over $3.5 billion. In the first half of 2024, climate tech startups accounted for 45% of the $325 million raised by African startups, reflecting increased interest in solutions for water management, renewable energy, carbon capture, and land restoration.
“The funding flowing into agritech, climate mitigation, and adaptation solutions is on the rise. This sector promises a bright future for African tech,” said Christophe Viarnaud, founder and CEO of AfricArena, a tech accelerator.
Venture capitalists are increasingly focused on innovations in clean energy, circular economies, predictive infrastructure, and sustainable agriculture. Since 2022, the Kenya Climate Innovation Centre (KCIC), a non-profit supporting small businesses in the climate tech space, has raised over $150 million for solar energy, waste management, and reforestation projects.
Gerishom Manyengo, a business analyst at KCIC, noted that more than 3,000 small businesses in their network are benefiting from the surge in climate funding. “There’s significant interest in scaling solar energy adoption, which is why KCIC, with support from the Moot Foundation, is running solar energy programs in horticulture, dairy, and aquaculture across Kenya, Uganda, and Tanzania,” Manyengo explained.
As climate venture capital interest in Africa grows, funding for the sector has surged from $340 million in 2019 to $1.1 billion in 2023, according to The Big Deal. Logistics, transport, energy, and water are the leading subsectors, receiving $215 million and $132 million, respectively. Josh Romisher, CEO and co-founder of Holcene, an African-focused climate VC, remains optimistic about future growth.
“Africa is on the verge of major growth and will play a key role in the global climate conversation. We need to develop it differently and more sustainably, and there are incredible innovation opportunities available right now,” Romisher said.