Equator, an African venture capital firm, has raised $55 million for its first fund aimed at supporting early-stage climate tech startups across the continent.
The fund will focus on helping companies that are working to solve climate challenges but often struggle to access early funding.
In many African countries, climate tech startups face a tougher funding environment compared to those in developed markets, where governments often provide financial support.
Instead, these African startups mostly depend on development finance institutions (DFIs), foundations, and endowments.
This reliance makes them more vulnerable when global aid and development budgets are cut.
Climate tech companies typically require more funding than other types of startups, and a decline in support from DFIs increases the financial pressure on them.
Equator believes its fund can help fill this gap by investing in promising solutions that have the potential to attract more private investors.
“We are needed more than ever to support scalable ventures that are solving critical climate problems,” said Equator’s managing partner, Nijhad Jamal.
“Our investments aim to shift the focus from relying on aid to bringing in more private capital into Africa.”
Despite Equator’s goal of reducing dependence on aid, its fund is still backed by several DFIs and philanthropic organizations.
These include British International Investment (BII), Proparco, the International Finance Corporation (IFC), the Shell Foundation, and the Global Energy Alliance for People and Planet — supported by IKEA, the Rockefeller Foundation, and Jeff Bezos’ Earth Fund.
Equator plans to invest in 15 to 18 startups, offering between $750,000 and $1 million to Seed-stage companies and up to $2 million for those in Series A rounds.
Beyond funding, Equator also aims to help startups improve their business models, governance, and regional growth strategies.
The firm also plans to support follow-on funding rounds and bring in co-investments from its backers.
“In some of our companies, we are the only Africa-focused investor involved,” Jamal noted.
“So far, we’ve had strong success in getting our partners to invest alongside us in these ventures.”
Although Africa contributes less than 3% of global carbon emissions, it faces some of the worst impacts of climate change.
Through this fund, Equator hopes to support startups tackling both environmental and economic challenges in the region.
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