African agrifoodtech funding is experiencing a modest rebound in 2024, signaling a potential recovery from a tumultuous previous year. According to AgFunder’s latest African AgriFoodTech Investment report, startups in the sector raised $145 million in the first half of 2024, reflecting a 1.6% year-over-year increase compared to the same period in 2023. This growth comes on the heels of a significant downturn in 2023, when investment in African agrifoodtech plummeted by 62%, totaling just $275 million. Despite this uptick, Africa’s share of the global agrifoodtech investment landscape remains limited, accounting for only 1.6% of the total funding in 2023.
Over the past decade, global investors have poured $2.4 billion into African agrifoodtech ventures, a figure that represents just over 1% of worldwide investment in the sector. The recent increase in funding, however, is accompanied by a notable 27% decline in the number of deals closed in the first half of 2024. This trend may indicate a shift in investor behavior, characterized by a preference for backing fewer startups but providing more substantial support to those deemed most promising.
Kenya has emerged as the leading hub for agrifoodtech investment in Africa, attracting an impressive $83 million across 19 deals, which constitutes 53% of the continent’s total funding in this sector. This marks a significant resurgence for Kenya, highlighting its potential as a fertile ground for agrifoodtech innovation. Egypt follows as the second-largest recipient of investment, claiming 15% of the total, while Nigeria rounds out the top three with 10%. Notably, Egypt’s rise is particularly striking, having climbed three positions from its previous ranking, underscoring its growing significance in the agrifoodtech arena.
The report also reveals shifting dynamics in the categories attracting investment. Agribusiness Marketplaces & Fintech has overtaken Midstream Tech and In-Store Retail Tech to become the most popular category in 2023 and continues to dominate in 2024. This category has captured 41% of all funding dollars so far this year and accounts for 36% of deal activity. The focus on these areas reflects a broader trend towards enhancing efficiency and accessibility within the agrifood supply chain.
Gender diversity among founding teams has shown signs of improvement over the past decade, yet female-led startups continue to face challenges in securing funding compared to their male counterparts. In 2024, only six companies with female-only founding teams successfully raised funds, highlighting the ongoing disparities in access to capital for women entrepreneurs in the agrifoodtech space.
On a positive note, there has been a marked increase in climate tech investments within the African agrifoodtech sector. Climate tech now represents 40.5% of funding directed towards upstream categories in 2024, a substantial rise from 24% in 2023. This shift indicates a growing recognition of the importance of sustainable practices and technologies in addressing the pressing challenges posed by climate change.
While the first half of 2024 shows signs of recovery, the challenges faced in the previous year and the modest share of global investment underscore the need for continued efforts to enhance the attractiveness of African agrifoodtech to investors. The landscape remains competitive, and the focus on nurturing innovation, improving access to funding for diverse founders, and addressing climate concerns will be crucial for the future growth of this vital sector.