Startups have now been urged to embrace climate-resilient business models in the African Tech Sector.
This is according to the Ventures Platform landmark climate tech white paper entitled; ‘Innovating for a Sustainable Future: Leveraging Venture Capital and Startup Innovation to Combat Climate Change in Africa.
Formally launched at the recently held Africa Prosperity Summit in Lagos, the paper explores how the agility and innovation of startups, combined with the strategic deployment of venture capital, can catalyse the development and scaling of climate-smart solutions tailored to the specific needs and challenges of African communities and ecosystems.
The white paper further calls on climate tech startups to secure and maintain venture capital support, while providing an in-depth analysis of how venture capital and startup ecosystems can act as powerful engines of progress in the face of environmental adversity.
In a statement, Ventures Platform noted that it published the climate-tech white paper to better equip non-climate venture capitalists (VCs) and startups with insights and tools to support Africa’s climate resilience through strategic investments and operational choices.
This, the early-stage venture capital fund said, was drawing from its own learnings as a key player in Africa’s tech ecosystem and from broader research.
According to the United Nations, Africa contributes under 4% of the global greenhouse gas emissions yet suffers disproportionately from climate change.
The white paper proposes a simplified framework focusing on adaptation, mitigation and enablers, in a bid to guide the African VC and startup ecosystem in addressing climate challenges.
“Adaptation strategies include developing climate-resilient infrastructure and agricultural practices,” the capital fund said.
“Mitigation efforts focus on reducing greenhouse gas emissions through renewable energy adoption and sustainable land use while ‘enablers’ encompass financing mechanisms, policy frameworks, educational programs, and technological innovations.”
Presenting the white paper at the Africa Prosperity Summit, Ventures Platform Managing Partner Dotun Olowoporoku said that African VCs often prioritise impact and livelihoods along with traditional metrics, but there is an urgent need to focus on climate-resilient business models.
“After months of hard work and collaboration, we are proud to present our landmark climate-tech white paper which provides an in-depth analysis of the challenges and opportunities of climate tech in Africa, our role as VCs and startups, and the critical importance of taking a holistic and coordinated approach to fostering climate innovation,” he said.
Olowoporoku added that climate change poses formidable threats withthe potential for severe impacts across multiple sectors.
However, he said that building climate-resilient business models can unlock business, societal and environmental sustainability.
“As VCs, we can drive change in Africa’s climate action by providing funds, encouraging innovation, and scaling climate-smart solutions,” he continued.
“Startups like MAX, Rana Energy, and ThriveAgric, show how tech-driven solutions can address local issues and help global climate efforts.”
“At Ventures Platform, we are deeply committed to investing in companies that are not only commercially successful but also actively contribute to solving some of society’s collective challenges.”
Commenting further on the landmark paper, Ventures Platform Senior Investment Associate Dolapo Morgan noted that Africa is at the receiving end of the world’s climate disaster and it is important for us to turn this challenge into opportunities.
“It is time for entrepreneurs to focus on building climate-resilient business models for long term sustainability while creating innovative climate solutions to tackle climate challenges,” she said.
“We are already beginning to see some startups and investors move in this direction and that is a good start.”
“This white paper is a call for a coordinated Africa response towards scaling the opportunities that climate change presents to our technology sector, emphasising the pivotal role non-climate funds can play in complementing and amplifying the efforts of climate-focused investments.”
For climate tech startups in Africa to secure and maintain venture capital support, the capital fund further said it is crucial to demonstrate both the potential for significant climate impact as well as the ability to achieve venture scale economics.
This dual focus, Ventures Platform added, is essential in the context of addressing climate change while also delivering the rapid growth and high returns that VCs expect.
“To optimise this key positioning, Ventures Platform via the white paper, outlines key goals, strategies, challenges, and ecosystem support needed to enhance the impact of African climate tech startups, providing a comprehensive guide for non-climate VCs and entrepreneurs in the technology sector.” the capital fund said in a statement.
“It also proposes a framework for a coordinated climate response in the African tech sector.”
Some key recommendations offered in the white paper include:
- The need to establish an inclusive climate innovation fund to support underrepresented groups in climate entrepreneurship.
- Development of Africa-specific metrics for measuring the success and impact of climate-focused startups, considering both environmental and socio-economic factors.
- The facilitation of cross-border collaborations between different types of VCs through networking events, joint investment programs, and knowledge-sharing platforms.
- Conduction of sector-specific climate opportunity assessments to identify and prioritise high-potential sectors for climate innovation in Africa.
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