ClimateTech startups in Africa attracted $6.35 billion in funding between 2016 and 2025, making ClimateTech the continent’s biggest venture-backed sector by investment share.
By 2025, the sector accounted for nearly 40% of all disclosed venture funding, overtaking FinTech for the first time, according to a new report by Briter Intelligence.
The report, titled “The State of ClimateTech in Africa 2.0: Moving Beyond the Headline Numbers”, shows that annual investment in ClimateTech grew from $206 million across 28 companies in 2016 to more than $1.5 billion raised by 223 companies in 2025.
Over the decade, 779 startups secured funding, as businesses developed trusted solutions for clean energy, agriculture, mobility, water, waste management and climate resilience.
Even with that growth, the report says funding was still concentrated in a few sectors and countries. Energy alone attracted about 65% of all ClimateTech investment between 2019 and 2025, while Mobility and Transport received around 11%.
Agriculture, food systems, water, circular economy and other climate-focused sectors continued to attract startups but secured a much smaller share of available capital.
Kenya maintained its position as Africa’s leading ClimateTech market, accounting for just over half of total funding during the period under review. Nigeria ranked second, followed by South Africa.
Together, the three countries in Africa attracted about 76% of total ClimateTech funding, although deal activity spread more widely across other African markets including Ghana, Rwanda, Tanzania, Egypt, Tunisia and Senegal.
The report also points to a widening gap between the amount of capital available and the continent’s climate finance needs. Africa requires between $250 billion and $277 billion in climate finance every year until 2030, yet ClimateTech startups have attracted only about $1 billion annually on average over the past three years.
Researchers argue that venture capital alone cannot close that gap and say grants, concessional finance, debt, guarantees and supportive government policies will all be needed to help the market mature.
Although venture capital is the most active source of funding by deal count, the financing structure is changing. Debt and hybrid financing are becoming more common in larger funding rounds, and by 2025 they accounted for almost half of the total value of ClimateTech funding.
The report says this shows greater participation by development finance institutions, banks and institutional investors backing more mature businesses.
Researchers, however, found that startups still find it difficult to secure funding in the earliest stages. Equity investments below $500,000 represented less than 0.5% of total ClimateTech funding despite overall investment more than tripling between 2019 and 2025.
The report warns that without stronger early-stage funding, fewer companies will grow into businesses capable of attracting larger investment rounds.
Funding is also uneven across different climate solutions. Mitigation-focused startups received about 84% of total ClimateTech funding, while adaptation businesses attracted only 16%.
Adaptation ventures, many of which operate in agriculture, health and water, rely heavily on grants and concessional finance because their business models are generally harder to commercialise.
Gender inequality is also prevalent across the sector. According to the report, startups founded solely by women received less than 1% of ClimateTech funding between 2016 and 2025.
Most investment involving women founders went to mixed-gender teams, while men-only founding teams continued to receive the largest share of funding.
Despite these challenges, the report says Africa’s ClimateTech ecosystem is becoming more mature. It notes that 206 disclosed exits were recorded between 2018 and 2026, with most acquisitions taking place in the energy sector.
The growing number of mergers and acquisitions reveals investors are beginning to see better opportunities to recover capital, although exit activity remains limited outside energy.
What comes next? The report argues that the priority should not simply be increasing investment but ensuring businesses can access the right type of financing as they grow.
It recommends stronger support for early-stage companies, more participation from local banks and institutional investors, improved risk-sharing mechanisms, and government policies that encourage investment in areas such as clean energy, water, food production and climate resilience.
