Kenya is positioning itself as a leader in securing capital for agricultural technology and food startups across Africa. Currently, a significant portion of capital for African startups—approximately 60 percent—comes from international sources, primarily from the United States and the United Kingdom.
On the continent, investors are mainly concentrated in Kenya, Nigeria, and South Africa, where innovation and funding activity are most prominent. Kenya’s leadership in this sector is partly due to substantial investments in solar energy solutions and precision agriculture. According to the report *Evolution of Investment in Food and Climate Tech in Africa*, released by Katapult Africa, these three countries have consistently maintained their top positions in both the volume and total investment figures.
“There are more than 800 investors that have invested at least one or more investments into climate and food innovators across Africa since 2014. There are notably often multiple investors involved in a single deal,” the report states. Among these, Kenya, Nigeria, and South Africa are leading the continent in attracting funding for climate and food solutions.
Venture Capital Firms (VC) are the primary source of capital for startups, accounting for 29 percent of the deals. The findings also reveal that venture debt is becoming an essential funding tool, particularly for climate tech startups that have limited access to traditional equity financing. In 2023, African startups raised over $1.1 billion (Sh142 billion) in venture debt, doubling the amount from the previous year, reflecting the increasing demand for flexible financing options within Africa’s innovation-driven climate tech ecosystem.
Other financing models that investors are using include impact investments, which represent 11 percent of the deals, and corporate financing, which accounts for 10 percent. Conversely, government, bank, and private equity funding are less preferred methods for financing startups.
The survey indicates that the investment landscape in African food tech and climate tech is evolving, driven by a rising demand for sustainable solutions and new funding mechanisms. “The future of African food tech and climate tech is set for substantial growth, driven by emerging technologies and innovation hubs across the continent. Innovation hubs like Silicon Cape in South Africa and iHub in Kenya are fostering entrepreneurial ecosystems that provide access to funding, mentorship, and collaborative networks,” the report notes.
Eastern Africa is particularly characterized by emerging startup ecosystems, with Nairobi at its center.
The city has become a key hub for agritech and fintech startups, supported by incubators and accelerators like iHub and Nairobi Garage.
The Eastern African region raised over $2.5 billion (Sh322.8 billion) in 540 rounds of funding for climate and food startups over the past decade.
Western Africa followed with over $1 billion (Sh129 billion) raised in 300 rounds, while Southern Africa came third with $230 million (Sh29.6 billion) in 80 rounds.
Going forward, the report says that the African green bond market is projected to reach $5 billion (Sh645.6 billion) by 2025, providing essential funding for sustainable agriculture, clean energy, and other climate-related projects.
Impact investing, which prioritizes social and environmental outcomes alongside financial returns, is also expected to grow by 25 percent annually over the next five years.
“Global investors are increasingly focusing on sustainability, making African startups in climate tech attractive targets for impact capital.”
The application of artificial intelligence (AI) in agriculture is also expected to grow, with the market projected to reach $2.4 billion by 2026.
AI is already playing a role in enhancing crop yield predictions, pest control, and resource management, driving productivity and food security across Africa.
The survey notes that to support this growth, investments in digital and energy infrastructure are essential.
An estimated $100 billion (Sh12.9 trillion) will be required over the next decade to strengthen digital infrastructure, energy grids, and rural connectivity, paving the way for the broader adoption of new technologies.
