Catalyst Fund secures $8.6m in funding for climate-focused African startups

Catalyst Fund has successfully amassed $8.6 million which they plan to invest in African climate startups. The main aim of the Catalyst Fund is to fuel the growth of climate-focused pre-seed startups across the African continent. This funding round was backed by, FSD Africa Investments (FSDAi), Cisco Foundation, USAID Prosper Africa, and tech investor Andrew Bredenkamp.

Catalyst fund plans to invest in sectors such as agritech, climate fintech, insurtech, as well as startups engaged in fishery management, food systems, cold chain logistics, waste management, and water resource management. They have successfully supported ten startups from six different countries in Africa.

According to a report, the Catalyst Fund’s forward-looking strategy envisions investments in 20 startups during the current year and a total of 40 startups in the long run. For pre-seed startups, the Catalyst Fund offers an initial investment of $200,000, follow-on investments of up to $500,000 at the seed stage, and $1.5 million in series A rounds.

Catalyst Fund originally came into being in 2016 as a pre-seed accelerator, addressing critical challenges faced by startups, including funding, talent acquisition, and market access. Their approach was rooted in philanthropic partnerships with prominent organizations like the Bill & Melinda Gates Foundation and the UK Foreign Commonwealth and Development Office (FCDO).

During its tenure as an accelerator, Catalyst Fund played a pivotal role in nurturing 61 startups across 15 emerging markets, boasting successes like Turaco, Wasoko, Cowrywise, and FarMart in India. However, the fund underwent a transformation last year, shifting gears from an accelerator to a full-fledged VC fund.

The Catalyst Fund’s focus on climate change aligns with a growing trend of capital pools in Africa dedicated to addressing environmental challenges. Its expansive approach spans various sectors, as it firmly believes that every facet of the economy will need to adapt to climate change impacts.