Investing in climate resilience ventures in Africa: Catalyst Fund’s approach

Four billion people worldwide are vulnerable to the impacts of climate change and urgently need solutions to prepare, adapt and build resilience. Without solutions, 130 million people may fall back into poverty due to climate change impacts, erasing decades of hard-earning development gains. Resilience solutions are quickly becoming a basic demand for populations who are most exposed. 

Although it has contributed less than 4% of global emissions, Africa is the most vulnerable continent to climate change, with 48% of the continent’s GDP vulnerable to extreme climate patterns. Global stakeholders are recognizing this imbalance and building resilience and adaptation is increasing becoming a priority for many actors and over $100 billion will have been allocated to climate finance by this year with over $30 billion going to Africa. 

Vulnerable communities in Africa and other emerging markets need resilient food systems, sustainable energy providers, adapted healthcare services, and more. In particular, vulnerable households and businesses urgently need resilience solutions that can help them manage risks, adapt livelihoods and build resilience to the long-term effects of climate change. 

But not all resilience solutions are made equal. Resilience solutions need to be affordable, fit for purpose, and tailored to the needs, preferences, and market circumstances on the continent. Tech innovations, and fintech in particular, can play a critical role in making solutions more accessible, affordable, and appropriate. For example, fintech can help providers reach remote or thin-file populations, allowing for more tailored, flexible offers that suit the needs and behaviors of these populations, and by bringing down operational and transactional costs to make products more affordable. Experience in emerging markets and on the continent shows that innovators who can bring such products to market stand to scale quickly, earning users’ trust, filling substantial gaps in the market, and delivering returns for investors. 

There is a massive opportunity for tech entrepreneurs to build resilience solutions for vulnerable communities, leveraging the unprecedented digital and technology revolution happening in Africa today. Emerging markets innovators have the opportunity to lead the world in developing resilience solutions that will soon become imperative across the globe. 

Recognizing this opportunity, Catalyst Fund backs high-impact tech startups that improve the resilience of underserved, climate-vulnerable communities in Africa. We partner with mission driven founders who share our vision of a world where every individual has the tools and opportunities they need to thrive. We invest in three core areas to develop resilience solutions, enabled by fintech:

1. Financial resilience

Financial services like emergency remittances, insurance, and carbon credit payment systems are critical in helping vulnerable communities adapt and build resilience to the impacts of  climate change. For example, index crop insurance protects farmers from extreme weather events, the ability to save can help people manage income shocks, remittances services are critical after a disaster, and climate data solutions can inform the underwriting algorithms of credit and insurance solutions. 

2. Sustainable livelihoods

Climate adaptation solutions can bolster livelihoods that depend on natural resources like farming, fishing, and pastoralism, as well as enable a new range of green jobs. For example, regenerative agtech solutions, aquaculture, fishery management or agro-forestry solutions are all critical in building adaptive capacity. Embedded fintech innovations like digital payments, embedded credit, and insurance can make such solutions more affordable and accessible to the end-customer. 

3. Climate-smart essential services

Climate change stressors create urgent needs for energy, water, healthcare, cooling, waste management, and cold storage. Fintech innovations like automatic deductions and digital transaction records enable accessible models for remote, low-income people models like PAYGo, which breaks down service payments into affordable amounts.

Our unique outcomes-focused investment thesis spans sectors like financial services, agriculture, waste management, fishery, energy, and mobility, all of which need to undergo profound transformation in the face of climate change. 

Experts suggest that climate adaptation in Africa will require financing of over $50 billion a year until 2030. Globally, estimated annual adaptation needs are $160-340 billion by 2030 and $315-565 billion by 2050. Our goal is to start filling this gap, catalyze more investment, and enable the emergence of many more solutions to build a more resilient future. 

Meet our Portfolio 

Financial Resilience

  • Paddy Cover is enabling bespoke insurance products in Nigeria leveraging a unique agent model
  • Assuraf is offering digital insurance access in West Africa, including crop and disaster insurance
  • Octavia Carbon is Africa’s first carbon capture company, pioneering carbon markets on the continent

Sustainable Livelihoods

  • Agro Supply is helping farmers save for drought-resistant seeds and other green inputs and manage climate shocks with insurance
  • Farm to Feed is reducing food loss and improving farmer incomes 
  • VAIS is improving food security in Egypt with data intelligence for precision agriculture
  • Farmz2U is improving the resilience of farmers in Kenya and Nigeria via regenerative agriculture techniques
  • Sand to Green is transforming deserts into cultivable land in Morocco

Climate-smart Essential Services

  • Bekia is enabling recycling in Egypt and better incomes for waste pickers
  • Eight Medical provides emergency medical care as the “911 of Africa”, including to climate-related health conditions

Thoughts or feedback? Get in touch with us.

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We are actively looking for early-stage startups that improve the resilience of underserved and climate-vulnerable communities in emerging markets.