Climate & Environment

Catalyst Fund Raises First Round of $40 million investment in African Climate Startups

Published

3 weeks ago

September 10, 2023

Photo Credit: Catalyst Fund

The Catalyst Fund has achieved the initial close of its $40 million fund for investing in climate startups in Africa. The fund has announced that it has successfully raised $8.6 million, with support from FSD Africa Investments (FSDAi), Cisco Foundation, USAID Prosper Africa, and tech investor, Andrew Bredenkamp.

The fund’s aim is to invest in various sectors, including agtechs, insurtechs, climate fintechs, and startups focused on fishery management, food systems, cold chain, waste management, and water management.

This pan-African fund is primarily targeting pre-seed startups and has already made investments in 10 startups from six different countries, such as Egypt, Senegal, and Morocco. The plan is to invest in 20 startups this year and a total of 40 startups in the long term. Pre-seed startups can expect an initial investment of $200,000, followed by up to $500,000 in seed stage funding, and up to $1.5 million in Series A funding.

The Catalyst Fund is one of the growing number of new capital pools focused on climate change in Africa.

“Overall, having exposure of about $2.2 million for each startup makes sense because we are coming in super early to be the early catalyzer for other investors to come in. The instrument we use at the pre-seed stage is a standard SAFE (simple agreement for future equity),” said Catalyst Fund, Managing Partner, Maelis Carraro.

The pre-seed investment, according to includes $100,000 that would be utilised got providing technical support to the start-ups; operations by a team of experts.

Catalyst Fund was launched in 2015 as a global accelerator, managed by BFA Global and has becaked 61 companies across 15 emerging markets with since then.

In 2022, the Fund expanded its mandate to invest in enterprises that address climate change and plans to raise $40M pre-seed fund to support high-impact tech startups that seek to improve the resilience of underserved, climate-vulnerable communities across Africa.