Catalyst Fund, a pioneering pre-seed venture capital fund and accelerator focused on driving climate resilience innovation in Africa, had announced the raise of $8.6 million fund to invest in climate-focused African startups.
Catalyst Fund secured the funds from investors which include FSDAi, USAID Prosper Africa, Cisco Foundation, FSD Africa, and investment from seasoned tech investor and CEO of Acrolinx, all of whom are committed to enhancing the impact of African pre-seed climate-focused startups.
The total funds raised by Catalyst Fund reached the first close of its $40 million fund, intended for investment in climate startups in Africa.
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The VC accelerator plans to invest in agri-tech, insurtechs, climate fintechs and startups in fishery management, food systems, cold chain, waste management and water management.
It is expediting sustainable green growth, and will focus on solutions that can enable communities to better prepare for and manage shocks, adapt livelihoods to climate impacts and build long-term resilience.
The pan-African fund is targeting pre-seed startups and has already invested in 10 startups from six countries including Egypt, Senegal and Morocco. It plans to invest in 20 startups this year, and a total of 40 startups in the long-run.
Pre-seed startups will get an initial $200,000, follow on investments of up to $500,000 at the seed stage and $1.5 million in Series A rounds.
Speaking on the funds raised for Climate-focused African startups, Maelis Carraro, managing partner of the catalyst fund said,
“By blending equity investments with hands-on venture building, we believe we can unlock tremendous potential for innovative companies on the continent. Supporting ventures at the pre-seed stage requires more than capital. Our venture builders are the engineers, data scientists and growth marketing experts who can supercharge founders’ journeys toward building scalable and highly impactful ventures”.
The Catalyst Fund was launched in 2015, as a pre-seed accelerator addressing challenges such as funding, talent and market access for startups. However, last year, it switched from an accelerator to a VC fund.
Initially backed by the Bill & Melinda Gates Foundation and JPMorgan Chase & Co., and fiscal sponsorship from Rockefeller Philanthropy Advisors, over the years the accelerator scaled with support from the UK Foreign Commonwealth and Development Office (FCDO), PayPal, and Mastercard Foundation.
The Catalyst Fund startup accelerator worked to fill important gaps in the innovation ecosystems across Africa, Latin America and Asia, including: lack of patient capital to test and iterate products in-market, lack of skill sets to rapidly build viable solutions for underserved customers and lack of connections for many local founders with global and local investors and corporate partners.
The accelerator tackled these challenges by offering a combination of catalytic grant capital, bespoke venture-building support from market and sector experts and access to a global network of investors and corporate innovators, while sharing insights, learnings and toolkits with the broader inclusive tech ecosystem.
In line with its mission to support entrepreneurs who use technology, finance, and data innovation to tackle the biggest challenges and opportunities, in 2022 the VC accelerator expanded its mandate to invest in enterprises that address the most pressing global challenge, climate change.
The Catalyst Fund is among the growing number of new capital pools focused on climate change in Africa. The VC accelerator is so focused on climate adaptation solutions across sectors, with a goal to make communities more resilient to the impacts of climate change.
Since 2015, it has accelerated 71 companies across 15 markets. The VC firm has made a commitment to continue to accelerate inclusive tech companies across key markets in the coming years, from early-stage Fintech startups to digital commerce companies, to those focusing on climate change adaptation and more.