Agrotech funding across Africa has reached a promising plateau of approximately $1.5 billion, spread across more than 600 transactions since 2014. With the sector stabilizing, industry players are now setting ambitious goals for the future: a targeted growth to KSh 387 billion (roughly $2.6 billion) that emphasizes inclusivity and prioritizes women entrepreneurs across the continent. This progressive outlook was shared at the 8th Annual Learning Event (ALE), organized by Mercy Corps AgriFin, where over 400 stakeholders gathered to discuss pathways to a sustainable and inclusive agricultural technology ecosystem in Africa.
Setting a Sustainable Baseline in Agrotech Funding
David Saunders, director and AgBase programme lead at Briter Bridges, delivered a keynote titled “Burst Bubble or New Baseline?” at the event, underscoring the stabilization of agrotech funding as the sector matures.
“As of Q3 2024, there are at least 745 active agrotech companies across Africa, with over half securing funding,” he noted. This reflects the sector’s pivot towards long-term stability and resilience, in contrast to the initial rapid growth years.
AgBase, a Briter Bridges project supported by the Bill and Melinda Gates Foundation and Mercy Corps AgriFin, has highlighted South Africa as one of the “big four” agrotech investment hubs. But recently, funding has broadened beyond these traditional centers to emerging markets such as Morocco, Ghana, and Côte d’Ivoire. Ethiopia, Zambia, and Mozambique are also now securing greater shares of agrotech funding, signalling a trend toward regional diversification and targeted investment across the continent.
The KSh 387 Billion Vision: Amplifying Opportunities for Women Entrepreneurs
While stabilizing investment may seem like a capstone moment, key industry players are pushing for exponential growth that prioritizes women-led enterprises. The ambitious target of KSh 387 billion (around $2.6 billion) places women entrepreneurs at the center, seeking to redress historical gender disparities in agrotech funding. Saunders noted that mixed-gender teams have experienced a rise in funding share from 7% in 2023 to 15% this year. However, all-women teams account for only 2% of all agrotech funding, highlighting an urgent need for equity.
“Empowering women in agrotech isn’t just about bridging a funding gap; it’s about realizing the full potential of African agriculture by giving women the resources to scale solutions that are uniquely impactful for local communities,” Saunders shared, underscoring that achieving this ambitious target hinges on deep, systemic change in funding practices.
Shift Toward Smaller, Impact-Driven Investments in Africa
The evolving investment landscape reflects a cautious yet deliberate shift towards smaller deal sizes. In 2024, deals under $100,000 have surged to 59% of total agrotech investments, up from just over a third in prior years. This trend towards early-stage funding indicates an appetite among investors for broader, grassroots growth in agrotech that can foster innovation and resilience among a wider pool of startups.
Investors appear increasingly inclined towards impact-oriented funding, especially as larger deals over $1 million remain stable at only 20%.
“This pivot to smaller, diverse investments suggests a strategy focused on cultivating inclusive solutions tailored for long-term impact,” Saunders said.
The shift also reflects a broader trend toward gender-diverse funding models, which tend to prioritize sustainable, inclusive growth for a variety of stakeholders, especially women entrepreneurs.
Rising Role of Non-Commercial and Impact Investors
Non-commercial funders, such as accelerators, development finance institutions (DFIs), and social impact funds, have emerged as critical players in maintaining investment flows in Africa. While commercial funding once comprised half of all agrotech deals, recent years have seen a pullback, with commercial deals now making up only a third of total funding. Non-commercial and semi-commercial funders have stepped in to fill this gap, accounting for two-thirds of current deals, a trend expected to continue as agrotech shifts towards social impact.
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The backing from these alternative funding sources aligns with the growing desire among investors to support innovations that contribute to food security, climate resilience, and rural economic growth across Africa. By focusing on development-driven ventures, these investors are effectively fostering a new wave of agrotech solutions that can deliver lasting benefits to local communities.
Women-Led Agrotech: The Key to Unlocking Agricultural Potential in Africa
As Africa’s agrotech funding ecosystem gains stability, the focus on empowering women entrepreneurs is gaining momentum as a key component of inclusive growth. Research has shown that women-led agricultural enterprises are more likely to generate solutions addressing local community needs, making their inclusion in the funding landscape a strategic imperative for sustainable growth.
However, structural challenges remain. The share of funding going to women-led teams remains far lower than it should be, especially given the economic and social impact these ventures are poised to have in Africa. “Women are pivotal to Africa’s agricultural success, and reaching the KSh 387 billion target will require a genuine commitment from all stakeholders to prioritize and amplify their contributions,” Saunders emphasized.
Looking Ahead: Towards a Balanced and Inclusive Agrotech Ecosystem
In his closing remarks, Saunders called for a balanced approach that aligns commercial incentives with inclusive, impact-driven investments. As the industry stabilizes, the KSh 387 billion goal presents both a challenge and an opportunity for Africa’s agrotech ecosystem to grow in a way that is not only financially sustainable but also socially impactful. Saunders emphasized that while commercial funding remains essential, fostering an ecosystem supported by diverse funding sources is crucial for achieving long-lasting progress.
“We are at a turning point for agrotech in Africa,” he concluded. “By embracing inclusive, smaller-ticket funding that uplifts women entrepreneurs and prioritizes community-driven solutions, we can ensure a future where agriculture is a resilient, sustainable force for change across the continent.”
With a shared vision and collective effort, Africa’s agrotech sector is positioned to meet this ambitious target, paving the way for a more equitable, food-secure future.