Following a global trend, investment in African digital businesses that aim to slow the pace of change is starting to increase, though at significantly lower valuations than elsewhere.
Since the beginning of the year, investors’ interest in green tech businesses that provide solutions to assist nations adhere to the Paris Agreement’s aim of keeping global warming to below 1.5 degrees Celsius has increased.
While some venture capital firms are actively looking for startups, others are accumulating cash to take advantage of opportunities as they arise, such as acquiring successful and promising energy startups.
One of the biggest deals in this sector so far is the recent purchase of PEG Africa, a solar energy startup based in Ghana, by Bboxx, a power firm with its headquarters in the UK.
PEG has a customer base of one million people who use its pay-as-you-go solar home system. The company has approximately 500 people working in 100 centers and is already established in Senegal, Ghana, Mali, and the Ivory Coast. The deal is reportedly worth $200 million.
“The contract was finalized on September 6, 2022. Financial details have not been released, according to a statement from Bboxx.
Following the merger, the two companies—which now serve 3.5 million customers across ten African nations—became the fastest-growing clean energy companies on the continent.
The Energy Entrepreneurs Growth Fund (EEGF) received a $13 million injection from Canadian investor FinDev Canada in January. In sub-Saharan Africa, the EEGF makes investments in early- and growth-stage energy enterprises.
The fund, established by oil marketer Shell, aims to enhance clean energy access for local people and off-grid companies.
Persistent Energy, an African climate venture builder, secured a US $ 10 million series C funding round two months ago to bolster its staff and expand climate initiatives in Africa. According to the report, the investment has the potential to enhance 2 million lives, produce 6,000 green jobs, and reduce carbon emissions by 700,000 tonnes.
According to Tobias Ruckstuhl, managing partner of Persistent Capital, “By leveraging strong partnerships, we will be able to accelerate our most innovative venture building investments, driving the transition to clean energy, promoting e-mobility, and finding innovative business models and technological developments across the continent.
Twenty-two early-stage investments in pay-as-you-go solar residential systems, commercial and industrial solar, as well as e-mobility firms, including Kenya’s e-mobility company, Ecobodaa, have been made by Persistent throughout the past two decades.
Starting in October 2022, the Boston-based venture accelerator Catalyst Fund intends to start investing Fintech and climate resilience firms throughout Africa.
The resilience of underprivileged and climate-vulnerable people in emerging countries is something we are actively searching for in early-stage enterprises. Our next cohort will begin in October 2022,” the venture business declared.
It is searching for firms that offer solutions for recycling, carbon credits, sustainable agriculture, and utilities including clean energy and water management. FSD Africa has already contributed US $ 3.5 million to the fund to support these activities.
Energy entrepreneurs raised hundreds of millions of dollars in the first half of 2022, according to research firm Magnitt. 67 percent of this finance was driven by energy startups in Africa.
State of Climate Tech 2021, a comparative assessment from consulting firm PwC, also emphasizes the sector’s increasing allure on a global scale.
The report claims that global investments in climate technology increased significantly in the first half of 2021, from a low of US$ 28 billion in the second half of 2020, to US$ 87.5 billion.
The intrinsic value associated with reducing emissions makes this field a significant business opportunity, but there is still more work to be done to direct this investment properly, according to PwC experts.
US climate tech companies raised the most money ($56.6 billion), followed by those in Europe ($18.3 billion) and China ($9 billion), in that order. The majority of this surge in capital funding was aimed at electric automobiles.