Memo #12: NatureTech in Africa

 🌍️ The Context

• We often talk about Africa as a single nation. But it's essential to remember Africa is incredibly diverse in terms of culture and governance. Africa covers over 20% of the Earth's land area and is three times the size of Europe. The continent exhibits a rich tapestry of geography, populations, and culture

• The continent’s ecology is equally varied. Africa is home to several biodiversity hotspots:

  • The Congo basin: the second-largest rainforest in the world and one of the most biologically rich regions on the planet, covering six countries in Central Africa. WWF - Congo Basin Biodiversity

  • Eastern Afromontane region: stretching from Saudi Arabia to Zimbabwe, known for its high diversity in flora and fauna, particularly among plants and amphibians. Critical Ecosystem Partnerships fund - Eastern Afromontane

  • The Cape Floristic region: one of the world's six floral kingdoms and is a UNESCO World Heritage Site. UNESCO - Cape Floristic Region

• This ecological diversity makes it incredibly important for both nature and climate crises. 

And what about the climate context…?

• Between now and 2050, half of the world's population growth by 2050 is expected to occur in Africa. (United Nations, 2023).
  

• Africa remains one of the most vulnerable regions to climate impacts.. By 2023, African economies were losing between 2-5% of their GDP annually due to climate-related disasters. Projections indicate that adaptation costs will range between be over $30 billion per year by 2030 ​ (World Meteorological Organization). 
  

• The continent's agricultural systems, forests, and water bodies are not only deeply affected by climate change but also hold the key to mitigating its impacts

💬 Solutions

• In 2023, climate tech in Africa attracted $2.7 billion in investments, marking a 55% increase from previous years. The main hubs for these investments were South Africa, Kenya, and Nigeria, which have developed strong innovation ecosystems conducive to climate solutions​ according to Katapult.

Regarding Nature Tech, the story is promising as well. 

• Although it remains a relatively nascent sector compared to broader climate tech, the growth trajectory is promising. In 2023, Nature Tech startups raised approximately $120 million, reflecting a 30% increase from the previous year​

🗺️ Six start-ups to watch

Top start-ups to watch

1. Komaza (Nairobi, KENYA) 
   Focused on sustainable forestry to revive the productivity of degraded lands in the world’s most deforested areas.

   Latest Round Series: Series B; July 2020; $28M

   Investors: Led by Novastar Ventures in collaboration with Novastar LPs AXA Investment Managers and the Dutch development bank FMO,

   News: Launched a timber processing plant in Kilifi, Kenya, utilizing advanced CCA treatment for long-lasting timber. They now work with over 14,000 farmers and planted 1.5 million seedlings recently.

2. Blue Forest (Mozambique) 

   Specializes in mangrove restoration to protect coastal areas, enhance biodiversity, and sequester carbon.

   Latest Round Series: Series A; October 2023; $25M

   Investors: True Ventures, Elemental Excelerator, Granite Ventures, and Mindset Ventures.

3. EcoPlanet Bamboo (Ghana) 

   Develops commercial bamboo plantations to restore degraded land, provide sustainable biomass, and sequester carbon.

   Latest funding: $15M, April 2017

   Investors : International Finance Corporation 

4. MitiMeth (Lagos, Nigeria)

   A social enterprise that transforms invasive water hyacinth into eco-friendly products like ropes, baskets, and furniture.

   Funding: Grants and prizes from Orange Social Venture Prize and Tony Elumelu Foundation Grant.

5. Wefarm (Kenya)

   A farmer-to-farmer digital network that supports smallholder farmers across Africa in sharing knowledge and best practices for sustainable agriculture.

   Latest round: Series A; 2020; $13 million 

   Investors: True Ventures, LocalGlobe, Latitude Ventures and Anthemis Group.

6. Safi Organics (Kenya)

   Produces affordable organic fertilizer from agricultural waste. By promoting organic farming and reducing the reliance on chemical fertilizers.

   Funding: $20K in grants ; May 2021

   Grant received from: MassChallenge, Echoing Green and various accelerator programs.

💰️ 4 Investors to watch

Over the past few years, Nature Tech startups in Africa have attracted increasing attention from both local and international investors. These VC’s are leading the charge:

1) Conservation International Ventures (CIV): CIV recently invested in startups working on sustainable forestry and carbon sequestration. Their latest funding round supported early-stage companies in Kenya and Tanzania, focusing on reforestation and biodiversity protection.

2) GreenTec Capital Partners: Targets startups that align with the Sustainable Development Goals (SDGs), focusing on technology that enhances resource efficiency and sustainability.

3) Novastar Ventures: an East African VC firm that backs scalable, high-impact businesses. Novastar’s portfolio includes Komaza, a forestry startup based in Kenya that is revolutionizing smallholder tree farming. (Venture Capital Journal).

4) Holocene: Aims to catalyze sustainable development across Africa by investing in startups and companies that operate in the agritech, biotech, and nature tech sectors. Their portfolio includes companies like Wild Bio, which focuses on developing bio-based solutions for regenerative agriculture, and Mavuno, a data-driven platform that helps farmers increase yields.

🐘 The opportunities

1. Direct benefits for local communities: inclusion, economic development and adaptation

• Harnessing local communities' knowledge of ecosystems can ensure solutions are both sustainable and inclusive. Programs like Komaza in Kenya empower smallholder farmers through sustainable forestry, while initiatives like the Great Green Wall and WeFarm showcase how local knowledge can drive environmental restoration and resilience. These projects also create long-term employment, upskill communities, and ensure shared benefits for all stakeholders.
  

• NatureTech can also support economic advancement and climate adaptation. A study by the World Resources Institute (WRI) noted that restoring 100 million hectares of degraded land in Africa could generate up to $84 billion annually in economic benefits through sustainable agriculture, ecosystem services, and forest products . We also anticipate an increasing trend of startups focused on climate change adaptation

2. Government and global support

• African governments are increasingly incorporating Nature Tech into their climate adaptation strategies. The African Forest Landscape Restoration Initiative (AFR100), launched in 2015, aims to restore 100 mn hectares of degraded land across the continent by 2030. This initiative has attracted support from global organizations like the World Bank, the Green Climate Fund, and private sector investors .
  

• Countries like Ethiopia, Kenya, and Rwanda are leading the way with national restoration strategies. Ethiopia, for example, has already restored 15 million hectares of degraded land and aims to restore another 7 million hectares by 2030 .

• The Green Climate Fund (GCF) will allocate billions in financing to projects aimed at restoring ecosystems. From 2025, at least four African countries will receive 309.3 million dollarsin ecosystem-based adaptation projects. These funds are helping Nature Tech startups develop innovative solutions like regenerative agriculture, sustainable forestry, and ecosystem restoration .

3. Supporting biodiversity and carbon credit markets

• Africa is emerging as a key player in the voluntary carbon market and emerging biodiversity credit market. A report by McKinsey projects that carbon markets in Africa could generate up to $6 billion annually by 2030 and supply up to 20% of the global carbon credits. Countries like Kenya, Ghana, and Gabon have positioned themselves as leaders.
  

• Nature Tech startups can support project development and financing for these markets. There is significant opportunity for startups that can provide solutions to enhance the credibility and performance of the carbon and emerging biodiversity credits markets.

🌋 The challenges

• Limited Access to Capital: While Nature Tech investments in Africa have grown, they still lag significantly behind other sectors like renewable energy or fintech. Startups often struggle to raise capital as investors perceive longer timelines for returns and uncertain regulatory frameworks. Furthermore, the lack of quantifiable metrics to evaluate ecosystem impact makes many investors hesitant to enter the space.

• Policy and Regulatory hurdles: Regulatory support for Nature Tech solutions is still fragmented across African countries. While some nations, like Kenya, are leading the way with pro-innovation policies, others lag behind, making cross-border scaling a challenge for startups. Harmonizing environmental and investment policies across the continent would encourage more VC activity and enable Nature Tech startups to grow.
  

• Infrastructure gaps: Nature Tech solutions often require robust infrastructure, such as data collection systems for soil monitoring or advanced logistics for reforestation efforts. Many African countries still face significant infrastructure deficits, which can hinder the scale and implementation of Nature Tech solutions.

🌬️ Hear it from the experts