Venture capital firm Novastar Ventures has received a $40 million (Sh5 billion) equity investment to back climate tech startups in Kenya, Rwanda, Nigeria, South Africa and Egypt.
The Nairobi, Lagos and London-based VC company invests in early- and growth-stage African businesses using technology to solve problems in a “planet-positive” manner.
The new commitment is from the Green Climate Fund (GCF), a global fund for developing countries set up by the 194 countries that are parties to the United Nations Framework Convention on Climate Change in 2010.
It is part of Novastar’s $200 million (Sh25.9 billion) third Africa People and Planet Fund (NVIIII), which GCF said will be invested in startups that promote “a clean, inclusive, and sustainable development path for Africa” in the five markets.
“Investments will be channelled into companies focused on three main themes: services that enable adaptation and resilience; clean technology for decarbonising economic growth; and innovative climate technology for natural resources,” the multilateral fund said in a statement.
Other investors in Novastar’s NVIIII include British International Investment and three Japanese players: the Japan International Cooperation Agency, Sumitomo Mitsui Banking Corporation and Mitsui OSK Lines.
Since it was launched in 2014, Novastar’s portfolio spans Africa’s four largest venture capital destinations —Kenya, Nigeria, South Africa and Egypt—and Ethiopia and Rwanda.
Locally, it includes the electric vehicle startup BasiGo, the agri-tech venture iProcure, clean cooking firm Koko Networks, Poa Internet— an Internet Service Provider, and the insurance technology startup Turaco.
There has been increased investment interest in climate tech and green energy solutions across Africa in recent years, as the sector inches closer to financial technology (fintech), whose startups have received the largest chunk of investment.
Last year alone, data from the startup funding tracker Africa: The Big Deal shows that fintech ventures attracted over $1 billion (Sh129 billion), representing 47 percent of the continent’s startup funding.
Climate-related tech startups claimed 32 percent of the amount in the energy, agri-tech, green transportation and waste management sectors.
The database also indicates that since 2019, 26 of the top 100 most funded startups in Africa fall into the ‘climate tech’ sub-sectors. Fintech has produced 42.
