Startups operating at the nexus of climate and agriculture in Africa have attracted just over USD 1 billion in venture funding over the past decade, according to data from AgBase, a business intelligence platform hosted by Briter and Mercy Corps AgriFin. This represents nearly two-thirds of all capital flowing to AgTech ventures, and just under one-quarter of the continent’s ClimateTech funding.

However, our Landscape of Climate Finance for Agrifood Systems 2025 (Agrifoods Landscape) shows that venture funding accounts for just a modest amount of total climate financing for agrifood systems in Africa — far below what’s needed to help close the estimated global shortfall of over USD 1 trillion in annual funding needed to align these systems with the climate-focused SDGs by 2030.

Beneath these headline figures lies a more nuanced story: although venture funding represents a small slice of overall agrifood funding, it plays an outsized role in driving technological adoption and impact across agrifood systems in Africa and other emerging markets.

The Agrifoods Landscape shows that technological breakthroughs have significantly shaped agrifood financing in emerging markets. Globally, over a third of all climate financing for agrifood systems has gone into one technology: solar-PV systems (agrivoltaics). While most of this volume is concentrated in Asia, Briter data shows that solar-PV and battery storage solutions account for nearly 80% of all funding to ClimateTech ventures in Africa.

Across the continent, ventures like SunCulture, Victory Farms, and Pula have demonstrated how technology, venture funding, and concessional financing can be combined to unlock solutions that have become game changers across a range of agricultural settings — from powering irrigation systems on smallholder farms, to providing energy to protect off-grid farms and cold storage facilities against increasing climate risk. Venture funding can fill critical financing gaps where technological and business model risks are too high for traditional financiers and concessional funders to address, but where getting innovations to market is critical for long-term impact.

It’s not just startups that are driving this innovation: Corporates in Africa and beyond are also embedding new technologies into their offerings. Multinationals like OCP and Yara International have launched corporate venture arms focused on soil nutrition, regenerative practices, and other pillars of sustainable agriculture. The Agrifoods Landscape notes that global corporate climate financing for agrifood systems rose nearly tenfold from 2019/20 to 2021/22.

Despite the role venture funding can play in supporting the growth of innovative AgTech startups, funding in Africa has declined since the high-water mark recorded in 2022. Briter's State of AgTech Investment in Africa 2024 report shows that annual funding to African AgTech ventures has fallen to around USD 200 million a year, less than half the USD 500 million raised in 2022. As venture funding loses momentum in Africa, several risks to the AgTech ecosystem are emerging:

🍂 Declining commercial interest: Commercial funders accounted for nearly 60% of all African AgTech deals in 2021, but made up just over a third of all deals in 2024. This likely overestimates commercial interest, as many of these commercial funders source their capital from concessional funders. Commercial funders, particularly venture capitalists, increasingly question whether these AgTech startups are sufficiently “backable.” At the same time, while concessional funders are stepping in, pressure on traditional donor programmes to cut funding is mounting. Any remaining donor capital will therefore need to serve as a temporary, catalytic bridge, taking on more risk in the next few years to crowd in private investors rather than substituting for them.

🍂 Gaps in funding technological breakthroughs: Scaling local science and innovation is another major challenge. From new seed varieties to seaweed cultivation, alternative proteins, and carbon sequestration, scientific breakthroughs struggle to reach markets without flexible early-stage capital. AgBase data shows venture funds such as Catalyst Fund, Mercy Corps Ventures and Equator VC have played a vital role by deploying USD 250,000 to USD 1 million tickets into unproven models — an area where most public and private funders hesitate. Without such funding, we risk stalling the pipeline of breakthrough AgTech solutions.

🍂 Struggles balancing impact and sustainability: Last, but probably most importantly, is the ongoing tension between achieving impact and building sustainable business models. Agriculture startups are already challenging to get off the ground, and targeting smallholder farmers — who are the hardest to reach and have the least ability to pay — makes it even harder. Yet in markets like Kenya and Nigeria, AgBase data shows that nearly 90% of AgTech funding has gone toward smallholder-focused solutions. Many of these startups struggle to raise commercial follow-on capital or achieve sustainable scale. With capital scarce, prioritizing these startups skews risks, undermining long-term ecosystem health and investor interest in favour of short-term impact gains.

WDeclining commercial interest, funding gaps, and struggles in balancing impact and financial sustainability are early warning signs that suggest a need to rebuild a better AgTech funding model in Africa and other emerging markets. These warning signs are now shining brighter as deep cuts planned by several big bilateral donors could reduce or eliminate the concessional capital many ventures rely on, just as venture cheques become scarce. We still have more questions than answers, but three priorities can steer the discussion while this window of concessional capital is still open:

🍃 How do we rebalance the role of concessional funders? While concessional funding currently plays a central role in AgTech funding, how can remaining donor dollars shoulder more early-stage risk for the next two to three years, crowding in private investors rather than substituting for them?

🍃 How do we build genuine risk-taking funding models? Blended finance works well for proven, bankable ventures. However, what will it take to create funding models that don’t rely on concessional funds and can still support early-stage, untested solutions, creating pathways for venture funding to bring them to market?

🍃 How do we reframe smallholder impact for long-term resilience? Does focusing almost exclusively on smallholder farmers drive meaningful sector-wide progress, or could it inadvertently constrain innovation and limit commercial funding? Would a broader investment approach ultimately deliver more sustainable impact for smallholders in the long run?

These questions are not easy, but they are increasingly guiding our work.