As the global community seeks to cut greenhouse gas emissions in half by 2030, investments in sustainability innovations are on the rise. Technological solutions to help tackle climate change captured a quarter of every venture dollar invested in 2022, and overall funds surpassed USD 50 billion, according to a report by Big Four accountancy firm PwC.
The climate tech sector braved economic headwinds caused by the Russian invasion of Ukraine and inflation, surviving its first major test in a decade. That’s an encouraging sign, the report’s authors claim – although a lot more funds are needed for early-stage startups in key sectors such as food waste reduction and new solar power technologies, which remain underfunded compared to other sectors such as mobility.
Across Africa and Latin America, young entrepreneurs are implementing home-grown solutions to reduce the environmental footprint of the agricultural, packaging and energy sectors. Several have made it into the rankings of the most promising climate, environmental and circular economy startups in their respective regions. Here are three climate tech startups to watch in 2023:
Agriculture is at the center of the climate, land, and biodiversity agendas. It generates up to 29 percent of greenhouse gas emissions, accounts for 70 percent of freshwater consumption globally, and leads to air and water pollution through the overuse of agrochemical inputs. What’s more, millions of tons of crops are lost each year to drought, floods, pests, and the long journey from farms to cities.
In 2016, three young engineers in Sao Paulo, Brazil set out to build the first vertical urban farm in their country to produce fresher leafy greens more sustainably. Vegetables are cultivated in soil-less multistory towers bathed in blue and red LED light, which blend into a pink glow, and proprietary automated systems control conditions around the clock, including temperature, humidity, nutrients, lighting, and carbon dioxide levels.
According to Pink Farms co-founder and CEO Geraldo Maia, vertical precision farming can produce 350 times more crops per unit of ground area, reduce water use by 95 percent, and cut fertilizer use by 60 percent compared to traditional agriculture. Growing microgreens in a controlled environment means they do not need to use pesticides and herbicides.
The company sells its urban-produced greens in Sao Paulo through a subscription system and in retail stores. “Being hyperlocal allows us to greatly reduce food miles and emissions from transportation, while increasing shelf life more than three times and practically eliminating product losses along the supply chain,” says Maia.
Every solution has its trade-offs: vertical farms, for instance, rely on artificial lighting and significant energy inputs. But Maia says the environmental benefits of these systems outweigh their limitations – and that these benefits will increase as renewable energy becomes cheaper and more efficient.
Following the latest round of investment, Pink Farms’ future looks bright. The company is building a next-generation vertical farm to increase production tenfold and is planning to open five new facilities in other parts of Brazil, as well as constructing towers to supply specific customers in food service and retail.
“We see more and more investments into companies that are addressing environmental and sustainability concerns, and we expect the funds to keep flowing,” says Maia.
In sub-Saharan Africa, more than half of the labor force works in agriculture, but yields for key cereal crops achieve less than 25 percent of their potential, according to the FAO. Most crops are rainfed, and as such are significantly impacted by the increase in droughts and floods caused by climate change; food prices and security are affected in turn.
Smallholder farmers sometimes irrigate their fields with diesel and petrol pumps, which are expensive and polluting. As an alternative, Kenyan startup SunCulture is offering farmers solar-powered irrigation systems that, with the flick of a switch, can also provide electricity for their households. The system is simple: the company installs a solar panel on the roof and connects it to a battery inside the house, which is plugged into a water pump that can irrigate up to three acres (1.2 hectares), the average size of farms in the region. Farmers can pay the kit off in installments.
The startup, cofounded by Kenyan-born Samir Ibrahim (who is now the CEO) and Charles Nichols, has raised more than USD 40 million and expanded to Ethiopia, Uganda, and Togo.
Now, the company is perfecting a smartphone digital platform to give farmers the information they need to improve yields: hyperlocal weather forecasts, best planting and fertilization timing, and pricing information. The startup is also rolling out soil sensors and weather stations to improve the quality of the information it provides, with the possibility of developing yield models and water table depth maps in the future.
In its first four years of operation, SunCulture claims to have prevented the use of nearly 70 million liters of diesel and petrol. The company hopes to prevent the release of three million tons of carbon dioxide over the next six years.
Humans produce 300 million tons of plastic waste each year – equivalent to the weight of all the entire human population – and only 9 percent of that is recycled, according to the UN Environment Programme (UNEP). To shift the dial, Chilean startup Algramo is working to drive a refill revolution, in collaboration with large detergent brands and supermarket chains operating in four countries. “We want to empower customers to radically change their consumption habits,” says the company on its website.
Users can order as much or as little product as they want – hence the name of the company, which translates to ‘by the gram’ – and refill their smart containers from in-store vending machines. The company uses radio-frequency identification (RFID)-tagged bottles and internet of things technology to deliver products in the desired quantities – and in a way that is traceable by both the consumer and the brand. Packaging savings are passed on to the consumer, making the products affordable and the refilling process worthwhile.
Algramo was founded in 2011 by José Manuel Moller, a university student at the time and its current CEO. It has repeatedly been ranked as one of Latin America’s most promising startups. The company claims that its circular economy model has avoided the use of more than 97,000 kilograms of plastic through the reuse of nearly 800,000 containers. Now, Algramo plans to keep growing, entering new spaces – universities, schools, petrol stations and minimarkets – and overhauling its home delivery service to cope with the growing demand.
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