On Tuesday, Equator, a venture capital firm focused on climate technology in Sub-Saharan Africa, announced the final close of its first fund, securing approximately $55 million to support early-stage climate tech startups.
This move aims to bridge the funding gap for these startups, which often struggle to secure capital compared to their counterparts in more developed regions.
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Equator fund targets up to 18 climate startups in Africa
Equator’s fund is designed to invest in around 15 to 18 early-stage ventures, primarily in the energy, agriculture, and mobility sectors. The firm will provide checks ranging from $500,000 to $5 million, depending on the needs of the startups.
Nijhad Jamal, Equator’s founder and managing partner, emphasised the importance of investing in commercially viable startups that address real-world problems, stating, “It is not about investing in climate tech for the sake of it but investing in innovation and solutions to real and sizable problems”.
Equator’s investors include notable development finance institutions (DFIs) such as the World Bank’s International Finance Corporation (IFC), British International Investment (BII), and France’s Proparco, along with foundations like the Global Energy Alliance for People and Planet (GEAPP) and the Shell Foundation.
Despite contributing less than 3 per cent of global CO2 emissions, Africa is disproportionately affected by climate change, making investments like Equator’s vital for sustainable development.
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Equator supporting African startups
Equator’s role extends beyond financial support and aims to help startups understand unit economics, governance, and regional expansion strategies. By doing so, the firm seeks to make these startups more attractive to private capital, thereby reducing their reliance on aid and development finance.
Jamal noted, “In some of our companies, we are the only Africa-focused investor involved. So far, we’ve had strong success in getting our partners to invest alongside us in these ventures.”
Equator has already invested in companies based in Kenya, such as Roam, an electric motorcycle manufacturer, and SunCulture, a provider of solar-powered irrigation systems.