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Africa contributes less than 3% of the world’s energy-related carbon dioxide emissions but the continent will be one of the most impacted by the adverse effects of climate change. Some explanations for Africa’s vulnerability include poor diffusion of technologies and information relevant to supporting adaptation, usually provided by clean or climate tech companies.
Despite the precise role that technologies such as renewable energy, recycling and green transportation play in improving the world’s environmental footprint, raising venture capital has proved chiefly hard for the companies behind them in years past. However, investor appetite has been enhanced in recent times. In 2021, climate tech startups raised over $60 billion, about 14% of VC dollars raised that year; in Africa, clean tech accounted for 15% to 18% (about $863 million) of the total funding that venture capitalists poured into the region last year in companies such as Sun King, making clean tech second only to fintech.
Development finance institutions (DFIs), including the British International Investment (BII), FMO and Norfund, are active investors in the clean tech space, as are clean tech–focused funds such as All On, Ambo Ventures and Catalyst Fund. In the latest development, Equator, a climate tech venture capital firm focused on sub-Saharan Africa, has reached an initial close of its first fund with $40 million in commitments. Its limited partners include BII, the Global Energy Alliance for People and Planet (GEAPP), the Shell Foundation and impact investor DOEN Participaties, according to the company’s statement.
Equator backs seed and Series A startups across energy, agriculture and mobility sectors. On a call with TechCrunch, managing partner Nijhad Jamal said the firm is interested in these sectors because of numerous untapped market opportunities. He also noted that deploying capital at seed and Series A stages allow Equator to act as a bridge between startups’ earliest checks (at the pre-seed stage) and growth capital, which could come from its limited partners.
“The challenge for many of those larger funds and international investors is that they tend to come in when things have already been de-risked and proven out. At the seed and Series A stage, there is a shortage of capital and institutional investors supporting companies at that stage of their life cycle and journey,” commented Jamal. “The hope is that by investing at these stages, we can mobilize capital at Series B and growth equity stages from large regional funds, global climate tech funds, and corporations excited about the sector and region.”
Jamal, before joining Equator, had several stints with asset manager BlackRock and impact investment Acumen Fund, where he managed the firm’s clean tech group. At Moja Capital, a personal fund he founded, Jamal made seed and Series A investments across several sectors, including those central to Equator’s strategy: clean energy, agriculture and mobility. SunCulture, a Kenya-based off-grid solar tech for smallholder farmers, was one of Jamal’s investments. Equator made a follow-on investment in SunCulture and other startups backed by the firm’s operators, including Morgan DeFoort, partner at Equator and founder of Factor[e] Ventures; Apollo Agriculture; Odyssey Energy Solutions; and Roam.
L-R: Nijhad Jamal and Morgan DeFoort. Image Credits: Equator
According to Jamal, Equator wants to back tech-enabled ventures that bring some element of technology, whether hardware or software or business model innovation, to bear in a region where innovation might be lacking. As such, the fund will pay attention to technical founders with domain expertise who are building solutions around clean energy, agriculture and mobility, and who ultimately address the impact of climate change on income inequality in Africa.
“Climate change and income inequality are proven to be directly correlated. Data shows that the gap between the economic output of the world’s richest and poorest countries is 25% larger today than it would have been without global warming,” Jamal remarked. “So climate change has worsened global income inequality and we’re seeing that very acutely in sub-Saharan Africa. And the ventures and innovation that we’re investing in is a material component to addressing some of these challenges.”
Equator, hoping to make up to 15 investments throughout this fund’s life cycle, says it participates in round sizes of $10 million or less, which is typical for pre-Series B clean tech startups in sub-Saharan Africa. For seed stages, the clean tech VC invests between $1 million and $2 million; for Series A stages, it cut checks between $2 million and $4 million. The firm, which has teams in Nairobi, Lagos, London and Colorado, will also leverage support from Factor[e] Ventures, an organization of venture builders and pre-seed investors. While both companies operate independently, Equator and Factor[e] collaborate on sourcing deals and undertaking due diligence, and they share a post-investment support platform to provide value to portfolio companies as they scale.
“The reality is that capital alone is only part of the problem. Ventures also need highly active and engaged investors to help them reach the growth stage of their trajectory,” added DeFoort.
In all, Equator will be expecting to leverage the current shift in the global narrative about climate tech’s importance and its impact on climate change. The investments coming into the sector, despite lagging fintech by a mile, are progressively being funneled into reducing the cost of technologies such as solar systems and batteries while enabling better access for individuals and businesses with pay-as-you-go models. Jamal says these trends could make the sector more investable and, in many ways, more exciting. “We’re optimistic about the role that we have to play in this ecosystem. I hope this is the first of many funds that continue to follow in these footsteps because more capital, talent and innovation are needed to develop more holistic solutions to the challenges in the climate space.”
Equator secures $40M in commitments for fund targeting climate tech startups in Africa by Tage Kene-Okafor originally published on TechCrunch
Guest post by Marianne Dahl and Kristian Skrede Gleditsch
Some have suggested that military coups are the best hope for removing autocratic leaders and promoting democracy. Others contend that coups are more likely to spur increased repression and new autocratic regimes, undermining hopes of democratic reform. There are certainly historical examples where coups have preceded democratic reform—take for example the 1974 Carnation Revolution in Portugal. But coup attempts have also ushered in harsher autocratic rule, such as in Equatorial Guinea after 1968. The empirical record shows no clear or consistent relationship. A look at changes in Polity democracy scores, a common comparative measure of democracy and political transitions, shows that although political change is much more likely after a coup, moves towards democracy and autocracy are about equally likely.
In a recent article in the European Journal of International Relations, we argue that what happens after a coup hinges on popular mobilization. Democratic reform is more likely when coups occur in the context of popular mobilization, and autocratic entrenchment is more likely in its absence.
Considering leader incentives after coup attempts sheds light on why coups spur democratic reforms at times and autocracy at others. Both failed and successful coups leave political rulers in a challenging position. A coup reveals divisions among elites and is likely to exacerbate competition. It is often unclear who remains loyal and how much support an incumbent can count on. There is a high likelihood of new coup attempts, and rulers challenged by a coup are more likely to be exiled, jailed, or executed.
Rulers can respond to these challenges in different ways. They can try to annihilate threats or repress opposition. Increasing control through repression and purges is often an autocrat’s preferred response. But such strategies can be fraught with risks. Potential threats can be difficult to identify, and harsh repression can backfire and fuel opposition.
An alternative strategy is to promise democratic reform. Promises of reform can help enhance a leader’s appeal, and it is difficult to claim popular consent for seizing power in a coup without promising elections. Moreover, free elections and respect for political rights are increasingly held up as conditions for avoiding economic sanctions or securing external aid. Democratic reform can also allow rulers to establish a safer exit route should things not go their way. One out of three leaders who lose power in a coup are imprisoned or killed within the next year, but only one out of fifty leaders who lose power in elections face that fate.
Whether leaders choose repression and autocracy or democracy and elections depends on the presence of popular nonviolent mobilization. Popular mobilization—public protests, sit-ins, acts of defiance to orders, and strikes—decreases the viability of repressive strategies and increases revolutionary threat.
Coups reveal cracks within a regime, which popular mobilization can leverage and deepen. Further, a fractured regime is more vulnerable to popular mobilization. Divisions among elites can increase citizens’ expectations of success and encourage wider participation, resulting in more effective threats. Popular mobilization therefore increases a coup leader’s incentives to promise democratic reforms. In the risky aftermath of a coup attempt, incumbents may try to reach out to a mobilized opposition or the general population to increase their popularity and contain threats from elites. In this context, democratic reforms can decrease the risk of a new coup, since coup attempts are more likely when incumbents are less popular.
By contrast, leaders who do not face threats from mass protests have fewer constraints to repress or selectively accommodate potential coup-makers and less need to seek broader support. Repressive strategies are especially likely after successful coups without mobilization because repression is easier to enact after a display of power in seizing control, with at least the tacit support of security forces. In contrast, failed coups leave an incumbent weakened, with worse prospects for consolidating power.
Of course, popular mobilization by itself can trigger political change, and coups and mobilization may have common causes. Our article, which provides systematic empirical analyses using data for the period 1950–2019 on coups, mass mobilization, and changes in the level of democracy, shows that popular mobilization makes changes toward democracy more likely after a coup. In the absence of mobilization, successful coups are more likely to result in changes toward greater autocracy.
Coups and political disruptions happen all over the world, and their occurrence presents an opportunity for reform—towards democracy and openness—or away from democracy and towards further repression. The transition to democracy after the coup in Portugal was not a foregone conclusion, rather, popular mobilization helped steer the country toward a political transition. Although hope for a democratic transition in Sudan after the military coup ousting Bashir in 2019 was undermined by military rulers backtracking on promises, continuing protests make it more difficult to secure autocratic rule. Popular protests helped bring down the 1991 coup attempt in the Soviet Union and preceded a period of subsequent democratic opening in Russia. And if there were to be a coup against Putin, the prospects for subsequent democratic reform seem much better with popular mobilization than without.
Marianne Dahl is a senior researcher at International Peace Research Institute Oslo. Kristian Skrede Gleditsch is the Regius Professor of Political Science in the Department of Government at the University of Essex and a research associate at the Peace Research Institute Oslo.
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