Energy Emerges as Second Most Funded Sector in Africa’s Startup Ecosystem in 2024
The African startup ecosystem witnessed a surge in investment, with the energy sector rapidly gaining ground as the second most funded sector, trailing closely behind fintech.
In 2024, fintech solidified its position as the leading sector for start-up funding in Africa, attracting nearly half of the total investment.
The Energy sector gained significant ground, replicating its position from the previous year. Startups in this sector raised a total of $440 million, accounting for 20% of the year’s funding. Two significant players, D.light ($192 million) and Sun King ($87 million) contributed nearly two-thirds of the sector’s total.
The surge in investment in Africa’s Energy sector, was fueled by a confluence of factors which include;
* Soaring Energy Demand: Africa’s burgeoning population and economies are driving a significant increase in energy consumption.
* Abundant Renewable Resources: The continent boasts vast reserves of renewable energy sources, such as solar, wind, and hydropower, making it an attractive market for clean energy solutions.
* Technological Advancements: Innovations in energy storage, grid management, and renewable energy technologies are creating new opportunities for startups.
* Government Support: Many African governments are actively promoting renewable energy development through supportive policies and incentives.
However, the energy sector experienced a steep decline, with total funding dropping by 42% YoY. Other sectors, such as Agri & Food (-44%) and Healthcare (-61%), also suffered significant losses.
Logistics & Transportation did much better though, not only did it hold its third spot, but it was also the only sector to attract more funding in 2024 ($288m) compared to 2023 ($271m, +6% YoY), therefore seeing its share of the total funding grow from 9% to 13%. Three of 2024’s ten top raisers were in this sector: moove, Basigo and Spiro; they attracted 75% of the funding that went to the sector in 2024.
All in all, 80% of the funding invested in start-ups in Africa in 2024 went to the Fintech, Energy, and Logistics sectors.
This influx of investment into the energy sector is poised to have a profound impact on the continent, fostering economic growth, creating jobs, and improving energy access for millions of Africans.
As the energy sector continues to mature, it is expected to play an increasingly vital role in shaping Africa’s future.
