NAIROBI, Kenya – Kenya has emerged as a top destination for capital investment in agricultural technology and food startups across Africa, securing its position as a leader in innovation and sustainable solutions.
According to a new report by Katapult Africa, Kenya, along with Nigeria and South Africa, dominates the continent in attracting funds for climate and food tech ventures.
The Evolution of Investment in Food and Climate Tech in Africa report highlights that approximately 60% of capital for African startups still comes from international sources, primarily the United States and the United Kingdom.
However, within Africa, Kenya has attracted significant attention from investors, particularly in the areas of solar energy solutions and precision agriculture.
“More than 800 investors have made one or more investments in climate and food innovators across Africa since 2014,” the report states.
Kenya remains at the forefront of this activity, buoyed by its strong innovation ecosystem and increasing focus on sustainability.
Venture capital (VC) remains the leading source of funding for startups, accounting for 29% of deals across the continent.
The report also points to the growing role of venture debt, particularly for climate tech startups that struggle to secure traditional equity financing.
In 2023 alone, African startups raised over $1.1 billion (KSh142 billion) in venture debt, double the amount raised in 2022.
“Venture debt has become an essential tool, especially for companies focusing on climate tech, as they require more flexible financing options,” the report notes.
Other key financing models include impact investing, responsible for 11% of deals, and corporate investments, accounting for 10%.
Government financing, private equity, and banks, however, are less favored when it comes to supporting startup growth.
Kenya’s capital, Nairobi, has become a vital hub for agritech and fintech startups in Eastern Africa.
The report notes that the region raised over $2.5 billion (KSh322.8 billion) through 540 rounds of funding over the past decade, with Nairobi playing a crucial role.
The city is home to renowned incubators and accelerators such as iHub and Nairobi Garage, which offer startups access to mentorship, funding, and collaboration opportunities.
Western Africa follows closely behind, raising over $1 billion (KSh129 billion) in 300 rounds, while Southern Africa secured $230 million (KSh29.6 billion) across 80 funding rounds.
Looking ahead, the African green bond market is expected to reach $5 billion (KSh645.6 billion) by 2025, creating more opportunities for sustainable agriculture, clean energy, and climate-related projects.
Impact investing is also projected to grow at an annual rate of 25% over the next five years as global investors increasingly prioritize sustainability.
Additionally, artificial intelligence (AI) is set to play a growing role in agriculture, with the market expected to reach $2.4 billion by 2026.
AI technologies are already improving crop yield predictions, pest control, and resource management, driving productivity and food security across Africa.
To support this growth, the report emphasizes the need for significant investments in digital and energy infrastructure, estimating that $100 billion (KSh12.9 trillion) will be required over the next decade to bolster infrastructure and rural connectivity.
According to a new report by Katapult Africa, Kenya, along with Nigeria and South Africa, dominates the continent in attracting funds for climate and food tech ventures.
The Evolution of Investment in Food and Climate Tech in Africa report highlights that approximately 60% of capital for African startups still comes from international sources, primarily the United States and the United Kingdom.
However, within Africa, Kenya has attracted significant attention from investors, particularly in the areas of solar energy solutions and precision agriculture.
“More than 800 investors have made one or more investments in climate and food innovators across Africa since 2014,” the report states.
Kenya remains at the forefront of this activity, buoyed by its strong innovation ecosystem and increasing focus on sustainability.
Venture capital (VC) remains the leading source of funding for startups, accounting for 29% of deals across the continent.
The report also points to the growing role of venture debt, particularly for climate tech startups that struggle to secure traditional equity financing.
In 2023 alone, African startups raised over $1.1 billion (KSh142 billion) in venture debt, double the amount raised in 2022.
“Venture debt has become an essential tool, especially for companies focusing on climate tech, as they require more flexible financing options,” the report notes.
Other key financing models include impact investing, responsible for 11% of deals, and corporate investments, accounting for 10%.
Government financing, private equity, and banks, however, are less favored when it comes to supporting startup growth.
Kenya’s capital, Nairobi, has become a vital hub for agritech and fintech startups in Eastern Africa.
The report notes that the region raised over $2.5 billion (KSh322.8 billion) through 540 rounds of funding over the past decade, with Nairobi playing a crucial role.
The city is home to renowned incubators and accelerators such as iHub and Nairobi Garage, which offer startups access to mentorship, funding, and collaboration opportunities.
Western Africa follows closely behind, raising over $1 billion (KSh129 billion) in 300 rounds, while Southern Africa secured $230 million (KSh29.6 billion) across 80 funding rounds.
Looking ahead, the African green bond market is expected to reach $5 billion (KSh645.6 billion) by 2025, creating more opportunities for sustainable agriculture, clean energy, and climate-related projects.
Impact investing is also projected to grow at an annual rate of 25% over the next five years as global investors increasingly prioritize sustainability.
Additionally, artificial intelligence (AI) is set to play a growing role in agriculture, with the market expected to reach $2.4 billion by 2026.
AI technologies are already improving crop yield predictions, pest control, and resource management, driving productivity and food security across Africa.
To support this growth, the report emphasizes the need for significant investments in digital and energy infrastructure, estimating that $100 billion (KSh12.9 trillion) will be required over the next decade to bolster infrastructure and rural connectivity.
