Kenyan climate startups lead as East Africa becomes choice funding destination in 2024

East Africa has emerged as the region with the highest venture funding, in Africa in, 2024 with $725 million. This represents 33% of the total $2.2 billion raised. While this is an 18% drop from 2023, it implies that the region got 1 of every 3 dollars raised in Africa in 2024.

Behind the region’s impressive run is the rise of Kenyan startups which raised $638 million, representing 88% of the region’s total and 29% of the continent’s total $2.2 billion.

These include d.light’s $176 million securitization facility in July, SunCulture’s oversubscribed $27.5 million series B funding round and Basigo’s $44.5m series A funding targeted at delivering 1,000 e-buses across East Africa over the next three years.

With a combined $248 million in 2024, these three green/climate tech startups are responsible for roughly 39% of the total funding raised in Kenya in 2024. Indeed, climate tech startups have raised 44% of total funding in the East African country since 2019, amounting to about $1.5 billion.

Kenya’s emergence as the leading funding destination in Africa is owing mostly to the emergence of a robust climate technology sector that has since become the most viable and funded in the country. This is supported by organisations like the Kenya Climate Innovation Centre (KCIC), the Kenya Climate Ventures (KCV) and Octavia Carbon.

While climate tech companies seem to be leading the pack, many of their product distribution and financing components are powered by fintech solutions. For instance, BasiGo’s model hinges on making electric buses financially accessible to operators who ordinarily cannot afford them.

The model is not very different from d.light which democratises access to green energy solutions, making them available to ordinary users. This is the same with MKopa whose focus is granting financial access to people who can’t afford green energy solutions.

Consequently, these climate tech startups could easily pass for financial technology companies.

At BasiGo, our key innovation is not the E-Bus; it is our financing model called Pay-As-You-Drive. This tech-driven leasing model eliminates the high upfront cost of an E-Bus and charging infrastructure, making it affordable for bus operators in Africa to access. Our fintech has always been at the centre of our pitch to early-stage investors,” BasiGo CEO, Jit Bhattacharya says.

East Africa’s dominance backed by Kenya

Overall, East Africa, as a region, attracted the highest funding numbers on the continent with $725 million. This represents 33% of the continent’s total.

And, Kenya is the undisputed Big Brother of the region with 88% of the total. Tanzania came a distant second with $53 million- representing 7.3% of the total. Indeed, Tanzanian startups have raised up to $300 million since 2019.

Half of this total has been raised by two clean energy startups: Zola Electric and Nala Fintech.

Uganda came third with $19 million, representing 2.6% of the region’s total. Rwanda, Sudan and Ethiopia also raised significant sums.

The West African region is the second-most invested space in Africa, having raised a total of $587 million in 2024 representing 27% of Africa’s total. While this was a 3 per cent drop from its projected yearly growth, it is a massive improvement from 2023 when the region ranked fourth on the continent.

With a 70% share, Nigeria did not enjoy the leadership that Kenya, Egypt and South Africa have in their respective regions. This made West Africa the most balanced region where the regional lead enjoyed the least percentage of total shares.

Behind Nigeria is Ghana with $68 million raised. This represents 11.6% of the total. Benin Republic raised $50 million representing 8.5% of the total. Cote d’Ivoire raised $33 million representing 5.6% while Senegal raised $22 million representing 3.7% of the total.

The North African region raised $478 million in total funding in 2024, representing a massive 35% drop in yearly growth and 22% of the African total. Egypt, with $400 million, enjoyed the lion’s share of the regional total, accounting for 83.7%. Morocco, with $70 million, raised 14.6% of the total.

Tunisia and Algeria were jointly responsible for $8 million of the total.

The Southern African region made up the last of the pack, raising $397 million in funding, amounting to 18% of the continental total. This also represented a 36 per cent yearly decline. South Africa alone was responsible for 99.2% of the regional haul.

“There has historically been a lack of sizeable funding activity beyond South Africa in the region, which was even more extreme in 2024 when 99.4% of all regional funding went to the Rainbow Nation,” a report reads.

Only a handful of deals were recorded in Central Africa in 2024, for a total amount ($5m) more than 10x times lower than in 2023.