Every climate-focused venture capital firm operates with the belief that “if climate change doesn’t get us, our lack of innovation will.” Africa is most vulnerable to climate change, facing heatwaves, heavy rains, floods, tropical cyclones, and prolonged droughts.
For Satgana, a VC firm that has backed seven climate-tech startups across Africa, developing solutions to address the continent’s growing climate problems is existential.
Founded in September 2020 by Romain Diaz, Satgana invests between €100k ($105,000) and €300k ($315,000) in early-stage, category-defining climate tech startups across sectors like agriculture, carbon removal, industry and building, and mobility in both Europe and Africa. The firm aims to accelerate climate goals on the continent while creating jobs. So far, Satgana has backed 17 companies, including Kubik, an Ethiopian cleantech startup, and Mazi Mobility, a Kenyan mobility startup.
While Satgana invests in traditional climate tech sectors like energy, mobility, and waste management, the firm prioritises underserved areas. A recent report by Big Deal revealed that climate tech startups raised 35% of all funding in 2024 (approximately $500 million), with energy alone accounting for $300 million. Spiro, a leader in e-mobility, raised $50 million in the same period.
Satgana believes that investing in underserved areas of climate tech will lead to both environmentally impactful and economically viable solutions. The firm is also championing the idea of “green discounts” to accelerate the adoption of climate tech by making sustainable solutions more affordable.
In March 2024, Satgana closed its first fund ($8.6 million) to support at least 30 startups. Although this fell short of the firm’s target of €30 million ($32.4 million) set in 2022, CEO Romain Diaz attributed the shortfall to the challenging fundraising environment, particularly for first-time fund managers.
Diaz acknowledges the challenge of balancing affordability with sustainability. He notes that climate-friendly solutions are sometimes more expensive than traditional alternatives. However, he believes climate tech founders should focus on opportunities that both reduce costs and create significant impact.
In this interview with , Diaz discusses the untapped opportunities in Africa’s climate tech sector, what excites Satgana, and the qualities the firm looks for in founders and businesses it backs.
(This interview has been lightly edited for clarity)
TC: What data inspired the decision to become a climate-focused VC fund?
Africa has historically contributed just 2% to 3% of global greenhouse gas emissions, yet it remains the most vulnerable continent to climate change. From a business perspective, there is a significant opportunity to develop green technologies on the continent. Africa’s growing energy demand, combined with its entrepreneurial population, creates room for both social and environmental innovation. By channeling capital from the global North to the South, we aim to support Africa’s growth and challenge the narrative that the continent can only thrive through charity.
TC: What sort of innovation in climate tech excites you the most right now?
We’re particularly excited by innovations that tackle real-world problems in underserved areas, such as sustainable agriculture, energy, and construction. For example, in Kenya, climate change has disrupted farming due to erratic weather patterns, which is why we focus on solutions like resilient crops, precision agriculture, and farm management technologies that promote sustainability.
TC: What are the other underserved areas that pose commercial scale?
Other areas of interest include electric mobility and climate data systems.
TC: So far, Satgana has invested in climate startups focused on data, upcycling, and mobility in Africa. Are there other sub-sectors that Satgana wants to explore next?
Indeed, in terms of emerging trends, we are currently exploring opportunities in the biodiversity space. One area of particular interest is nature-based solutions.
TC: Nature-based solutions (NBS) involve using natural processes to address societal challenges such as biodiversity loss and disaster risk through carbon capture, and green infrastructure among others. As a VC firm, what do you think of these solutions scaling?
Africa’s rich biodiversity and natural resources offer immense potential, but there’s a gap between how nature grows and venture capital’s expectations. Nature-based solutions, like afforestation and reforestation, offer significant benefits, but nature’s incremental growth doesn’t align with the typical VC target of 25% IRR or a 10x return. This mismatch makes scaling nature-based solutions challenging.
What excites me is exploring models that bridge this gap. For example, Carbo Culture, a Finnish startup producing biochar, has successfully raised over $27 million by structuring financing at both the holding company level and through project-specific funding. This dual approach could serve as a model for scaling nature-based solutions.
TC: Given the unique challenges climate startups might face in Africa, what models do you think are most scalable?
One key insight we have seen, often popularised by Bill Gates about green technologies, is that the green option tends to be more expensive than the traditional one. But when we look at opportunities in Africa, we look for what we call a “green discount”—where the green solution is cheaper than the incumbent.
Let me give you a couple of examples. One of the companies we invested in is Revivo, which refurbishes electronic devices. These are more affordable because they reduce waste and avoid the production of new phones and laptops. It reduces environmental impact and offers a lower price than new devices. This “green discount” model makes a lot of sense.
Similarly, we have invested in Kubik, a company in Ethiopia that makes circular construction materials. Their products are 20% cheaper than traditional cement. These types of businesses are built around the concept of offering a green solution that is more affordable, which is something we always look for.
When it comes to scalable models, we typically favour modular and replicable solutions. Microgrids are an example of a scalable, decentralised solution.
TC: Beyond the founder, how does Satgana evaluate a potential startup?
When evaluating startups, we prioritize the strength of the founding team, ideally with two co-founders whose skills and experience complement each other. That said, we do invest in solo founders if they have complementary skills within their team. We look for a balance between visionary thinking and execution ability, valuing resilience, passion, and commitment. The ability to adapt and persevere through challenges is crucial.
TC: What countries will you be looking at to invest in next?
Our next target country is South Africa. Having lived there for seven years, I have a strong connection to the country and believe there are great opportunities for us to make an impact.
TC: What factors do you consider most critical for scaling a climate tech startup in Africa?
One crucial thing is having strong teams. The best business models can only succeed with great management. Building partnerships is another key aspect. Public-private partnerships and corporate collaborations can also help bring green businesses to scale. It’s important to adapt to the local context—every African country is unique, and adapting to each market’s specific needs is essential.
Lastly, we recommend pulling from diverse sources of capital. While equity is important (and that’s where we come in), it’s equally critical to explore quasi-equity, asset financing, debt, grants, and revenue-based financing. These various funding sources can help bring more capital into the green sectors of Africa, enabling them to scale.
TC: Is there a startup you wish Satgana invested in?
While we have no regrets with our current fund, we would have loved to be part of the earlier wave of climate startups in Africa, like Daylight, M-KOPA or Sun Culture but we didn’t even exist then. When we miss an opportunity we always analyse what we could have missed or done differently.
We follow a “no regret” policy, meaning that when we pass on an opportunity and see it succeed, we are happy because it’s good for the climate.
