Fintechs and e-commerce startups were still the darlings of VCs. Investments into climate and agri tech were low, while founders who managed to raise funds had to contend with lower valuations than other sectors.

Rhea, which collects and analyses soil samples to help farmers choose fertilisers and seeds suitable for their farms, is part of a constellation of African startups that caught the attention of investors at the just concluded AfricaArena climate summit in Nairobi. Rhea was awarded the best climate tech startup at the two-day event.

“It was challenging to attract investors because the focus on soil health improvement wasn’t mainstream. However, as we demonstrated traction in our core market and aligned with the growing focus on climate change, impact investing, and agricultural technology, we’ve seen more interest from both local and international investors,” Priscilla Wakarera, Rhea Co-Founder and CEO told TechCabal.

While VC funding for startups has been on a general decline, the proportion of money flowing to climate mitigation and adaptation startups is growing. Since 2019, the sector has raised over $3.5 billion.

In 2024 H1, the sector received 45% of the $325 million raised by African startups, reflecting the growing interest in the area. Climate tech firms offer solutions for water and sanitation, renewable energy, carbon removal, and land restoration.   

“The funding raised by everything related to agritech, climate mitigation and adaptation solutions is growing. This is the only sector that holds many promises for the future of African tech,” said Christophe Viarnaud, founder and CEO AfricArena, a tech accelerator.

Solutions such as clean energy, circular economy, predictive infrastructure and sustainable agriculture are attracting significant interest from VCs–and event donor funding. Since 2022, for example, the Kenya Climate Innovation Centre (KCIC), a non-profit organisation, has raised over $150 million in funding for small enterprises in the sector.

Gerishom Manyengo, a KCIC business analyst, told TechCabal that over 3,000 small businesses in its network are benefiting from a surge in funding for solutions in subsectors such as solar energy, waste management and reforestation.  

“There is strong interest in scaling up adoption and use of solar energy, and that’s why KCIC with support from Moot Foundation is implementing a solar energy programme in horticulture, dairy and aquaculture in Kenya, Uganda and Tanzania,” Manyengo said.

Climate VCs in Africa believe the continent has more potential as they expand their scope of interest to include food production and disaster management. Funding to the sector rose from $340 million in 2019 to $959 million in 2022, hitting $1.1 billion in 2023, according to The Big Deal.

Climate subsectors that have received more funding this year include logistics and transport ($215 million) and energy and water ($132 million).  Josh Romisher, CEO and co-founder of Holcene–an African-focused climate VC–believes that deals in the sectors will continue growing in the coming years.

“Africa is about to grow, it is about to consume and become a massive part of the global conversation on climate issues because we have to grow it differently and better. There are massive innovation opportunities that can be unlocked today,” Romisher said.

The funding saw a mixture of new and existing investors including AHL Venture Partners, an Africa-focused venture fund, and Everstrong Capital, an infrastructure investor constructing the Usahihi toll road connecting Kenya’s capital Nairobi and the port city of Mombasa. Beyond Capital Ventures has reinvested in a follow-up to its Series A equity commitment.

“This additional investment will accelerate the rollout of our EV energy technology and infrastructure to the mass market, bringing us closer to our goal of deploying 5 million electric motorcycles by 2033,” said Josh Whale, Ampersand CEO.

Founded in 2016 by Joshua Whale, the Kigali-based firm assembles and finances electric motorcycles. Ampersand claims that its motorcycles are 45% cheaper to operate and produce 75% fewer emissions than petrol alternatives, which currently dominate the market. The company also owns 18 charging stations in Kigali and Nairobi. 

The funding shows a growing appetite among investors for renewable energy and e-mobility investments. Africa has an estimated $4.87 billion motorcycle market, according to Statista, a data and market insight firm.

The new funding comes ahead of a Series B round to help the company ramp up its production in Kigali and Nairobi.

“As we look ahead to our upcoming Series B, we remain committed to reshaping how Africa moves by delivering affordable, low-carbon transport solutions that also drive green jobs and economic growth across the continent,” Whale said.

In June 2024, Ampersand struck a deal with Chinese electric vehicle and battery manufacturer BYD to build 40,000 electric motorcycles in Kenya and Rwanda by the end of 2026. 

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It will complicate the sale of Bamburi after Holcim, a Swiss construction materials manufacturer and its largest shareholder, approved an offer from Amsons Group on July 27. Holcim agreed to sell its 58.6% stake and is awaiting regulatory approval from the Competition Authority of Kenya (CAK) and the Capital Markets Authority (CMA).

If Savannah Clinker’s offer is approved by Bamburi’s board and the regulators, it will be one of the largest deals in the history of the Nairobi Securities Exchange (NSE). Savannah Clinker is owned by Benson Ndeta, a director of Savannah Cement, which entered administration in July 2023.

“Savannah Clinker Limited notifies the public that it has on 27th August 2024 served Bamburi Cement PLC with a notice of intention to acquire up to 100% of the ordinary shares of Bamburi,” the company said.

“The competing offer is in response to a proposed offer by Amsons Industries, of which notice of intention to make a take-over offer was issued on 10th July 2024.”

The company said Ndeta is “in the process of exiting as a director of Savannah Cement,” which has been rocked by boardroom wars and legal woes over billions of shillings owed to banks and suppliers.

Unlike Amsons Group, Savannah Clinker may not delist the company from the NSE.

“The competing offeror does not intend to de-list Bamburi from the NSE. However, should the competing offeror achieve acceptances of 90% or more of the offer share, the competing offeror shall in accordance with the take-over regulations, offer the remaining shareholders a consideration that is equal to the prevailing market price,” the company said.

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“Licensees or service providers are at liberty to raise any issue in the market with the ICT regulator,” CA told TechCabal.

On July 15, Safaricom asked the regulator to block satellite ISPs with operations in other countries, a move that could lock out Starlink which is the biggest satellite internet provider in Kenya. The Elon Musk-owned company relies on resellers to distribute its kits and install the service.

CA will now investigate and address Safaricom’s concerns, even as telco experts warn that the telco’s move could reverse gains Kenya has made in increasing internet access and reducing data costs.

Safaricom also alleged security risks to the country if the companies are allowed to operate without a physical presence or partnerships with local firms. It said licensing such companies “would mean negligible control for the government to ensure accountability for any non-compliance issues.”

“The authority independently examines such issues within its mandate and regulatory framework and responds appropriately. It is a normal practice as the Authority seeks to facilitate the development of the dynamic and rapidly evolving ICT sector,” CA said.

Safaricom did not immediately respond to a request for comments.

Safaricom dominates Kenya’s data market with a 36.7% market share, followed by Jamii Telecommunications and Wananchi Group at 23.2% and 22.7% respectively. It has laid 14,000km of fiber optic cables, connecting over 400,000 subscribers.

Starlink’s expansion, which offers faster speeds and relatively lower prices, could slow Safaricom’s data business growth. In 2023, the company’s mobile money service M-Pesa and data services pushed it to the first profit in three years.

Safaricom’s data revenue rose 18% to $1.4 billion, as call revenues shrank 0.6% to $608.4 million–continuing a trend observed in recent years.

Starlink’s new satellite updates could further upset local telcos’ call and messaging services if allowed to continue operating in Kenya. The satellite ISP announced on Monday that its upgrades will now bring call services, allowing users to bypass local providers.   

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“We propose that the CA instead consider mandating that satellite service providers to only operate in Kenya subject to such providers establishing agreement with an existing local licensee,” Safaricom said in a memo seen by TechCabal.

In the July 15 memo, Safaricom asked the regulator to assess the risks of allowing satellite internet providers to operate without an agreement with local companies. 

Safaricom did not immediately respond to a request for comments.

“Satellite service providers should therefore not be granted a license directly/independently but rather only permitted to operate under the license rights of the local licensee.”

The telco said allowing the satellite ISPs to operate without a physical local presence would make it hard for the government to regulate their operations. 

CA did not immediately respond to a request for comments.

Since its launch in 2023, Starlink has relied on third parties and resellers to distribute their hardware and connect users, an issue Safaricom raised in their memo to CA. 

Through discounts on its hardware and the introduction of a cheaper $10 monthly plan, data from CA shows that Starlink users grew tenfold in Q1 2024. On August 21, Starlink introduced a $15 monthly kit rental plan for users who cannot afford $350 to purchase the hardware. 

Starlink’s growing popularity has pushed existing local players to increase marketing to retain customers. Safaricom, which has talked about launching a satellite internet service, has a firm grip on the data market, with a 36.7% market share. 

Starlink did not immediately respond to a request for comments.

“Granting a license to an entity that will typically operate in Kenya without having a physical presence in the country (via third-party partners/resellers only. This would mean negligible control for the government to ensure accountability for non-compliance issues,” Safaricom said.

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While the value of the transaction has not been disclosed, KCB Group announced in March it agreed to sell National Bank for 1.25x of the bank’s book value. Given NBK’s book value of $79.77 million in 2023, the deal could be priced around $100 million.  

“I am pleased to inform you that the process is nearing completion and is only awaiting the required regulatory approvals, for which we believe we should be concluding very soon. In the coming months we shall communicate the next steps,” Joseph Kinyua, KCB Group chairman, said during the company’s H1 2024 earnings call on Wednesday.

KCB Group acquired NBK in 2019 and has spent over $60 million to ensure it meets CBK’s minimum capital requirements. The Nigerian lender is expected to inject more capital into NBK.  

Access Bank did not immediately respond to a request for comments.

“We are on the tail end of the process. I want to acknowledge and make a special mention of the contribution of the National Bank team, it’s not the easiest of a performance environment as it is in the market and when you have the uncertainty of a transfer and you continue to perform, you truly deserve a special mention,” said Paul Russo, KCB Group chief executive.   

The acquisition will expand Access Bank’s footprint in Kenya and could be concluded later this year. The deal is Access Bank’s second acquisition in Kenya under five years after the lender acquired Transnational Bank in 2020. NBK has a nationwide network and will increase the bank’s branches from the current 22.

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“Uber has made these pricing updates to ensure that drivers continue to have the opportunity to maximise their earnings while driving on the Uber app and at the same time, remaining at an affordable price point for riders,” Imran Manji, Uber head of East Africa, said in a statement.

On July 16, the drivers went on strike to force the apps to increase the minimum prices to $2.33 (KES300). They also wanted the companies to review their guidelines on suspending and deactivating accounts in disciplinary cases.

When that did not happen, the drivers resorted to charging their rates and taking rides offline. 

The sector union representatives who spoke to TechCabal said the raise was “insignificant.” They said the new prices still cannot cover high operational costs. 

“We don’t really feel it. We made our demands clear that we want at least KES300 as the base fare among other demands,” Zakaria Mwangi, the Secretary General of Ridehail Transport Association (RTA) told TechCabal.

“They’ve not gotten to 10% of our demands. We will be back at it again.”

Uber said it will increase investment in customer promotions to keep its rides affordable. Gig drivers have maintained that the rates charged by app companies do not reflect the rising cost of operations.

The company said it has introduced cash bonuses for partner drivers and is currently entering partnerships with vehicle maintenance companies to help operators cut costs.

Other companies including Bolt, Faras and Yego are yet to adjust their prices, following a meeting between the apps and the drivers on August 13.

The company is eyeing its first full-year profit in over a decade next year. 

“It goes to show what we can do as an airline. There is still room for improvement, and the board is happy with these results,” Michael Joseph, Kenya Airways chairman, said at an earnings call on Monday.

KQ’s total income rose 22% to $709.8 million (KES91.49 billion). Its operating costs dropped by 22% to $699.8 million (KES90.20 billion).

Allan Kilavuka, the airline’s group managing director, said that KQ is looking to break even by the end of 2024.   

“We are not there yet, but this is a significant milestone that indicates our intention to continue transforming this organisation to a fully stable and sustainable airline so this is something we want to celebrate,” Kilavuka said.

The carrier, which the government holds a 48% stake in, was insolvent in 2018 after years of expansion left it with huge dollar-denominated debts.