When discussing Africa’s tech ecosystem, fintech invariably takes centre stage. With billions of dollars in venture capital pouring into mobile payments, digital banking, and lending platforms, it’s easy to see why fintech dominates the conversation. However, this singular focus often blinds investors to equally compelling opportunities in underhyped sectors such as agritech, clean energy, and logistics. These areas, though less glamorous, represent the backbone of African economies and offer significant potential for both impact and returns.
Agritech: Feeding the Continent’s Future
Agriculture remains the lifeblood of Africa, employing nearly 60% of its workforce and contributing about 23% to its GDP. Yet, the sector is plagued by inefficiencies, from outdated farming practices to fragmented supply chains. Enter agritech, a sector leveraging technology to transform how food is grown, distributed, and consumed.
Startups like Kenya’s Twiga Foods are redefining food supply chains by connecting farmers directly to retailers through digital platforms, cutting out intermediaries and reducing waste. Meanwhile, Nigeria’s Thrive Agric uses data-driven solutions to help smallholder farmers access credit, farm inputs, and market information.
Despite these innovations, agritech has yet to enjoy the kind of funding fintech attracts. In 2022, agritech accounted for just 2% of Africa’s total venture capital funding. This discrepancy reflects a shortsightedness in investor priorities. With Africa’s population expected to double by 2050, the need for sustainable food production is critical. Agritech presents a unique opportunity to address this challenge while generating returns from a sector that will only grow in importance.
Clean Energy: Powering Growth Sustainably
Africa faces a dual energy challenge: widespread energy poverty and a growing demand for sustainable solutions. Nearly 600 million people on the continent lack access to electricity, while those connected to national grids often endure unreliable service. Clean energy startups are stepping in to bridge this gap, offering decentralised, renewable solutions that are not only eco-friendly but also economically viable.
Take M-KOPA, a solar energy company providing pay-as-you-go solar kits to millions of households in East Africa. Its innovative business model integrates financing with technology, allowing low-income households to afford clean energy without the upfront cost. Similarly, Nigeria’s Lumos Global combines solar power with mobile technology to deliver energy-as-a-service, a model that aligns with Africa’s burgeoning mobile economy.
Yet, clean energy startups struggle to secure the kind of funding lavished on fintech. This is a glaring oversight, given that energy access is a foundational enabler for other sectors, from education to healthcare. Moreover, the global push towards decarbonisation presents a golden opportunity for African clean energy solutions to attract international climate-focused capital.
Logistics: The Hidden Infrastructure of Commerce
Africa’s fragmented logistics infrastructure is both a challenge and an opportunity. Poor roads, inefficient ports, and unreliable delivery systems are often cited as barriers to doing business on the continent. However, these gaps also create fertile ground for innovation.
Companies like Kobo360 and Lori Systems are revolutionising freight logistics by digitising operations and connecting truck drivers with shippers through online platforms. Their tech-driven approaches have reduced transport costs, increased transparency, and improved efficiency in a sector that is the lifeline of trade.
E-commerce, another booming industry in Africa, also highlights the critical role of logistics. Jumia, Africa’s largest e-commerce platform, has had to invest heavily in building its own delivery network to overcome infrastructural challenges. This necessity underscores the untapped potential for startups focused on last-mile delivery, warehousing, and supply chain optimisation.
While fintech investors chase the next billion-dollar valuation, logistics startups offer something fintech cannot: the ability to unlock broader economic growth by solving fundamental structural problems. The sector’s impact extends beyond commerce, touching areas like healthcare logistics (think vaccine delivery) and agricultural supply chains, making it a cornerstone of sustainable development.
Why These Sectors Are Worth a Second Look
The underinvestment in agritech, clean energy, and logistics can be attributed to several factors. First, these sectors often require patient capital. Unlike fintech, where business models can scale rapidly, these industries deal with physical infrastructure, regulatory hurdles, and entrenched inefficiencies. Second, they lack the same media appeal as fintech, which dazzles with promises of financial inclusion and rapid user adoption.
However, these challenges also mean that barriers to entry are high, providing first-mover advantages for those willing to take the risk. Moreover, these sectors align closely with global megatrends such as sustainability, food security, and inclusive economic development—making them attractive to impact investors and development finance institutions.
A Call for Diversified Investment
The African tech ecosystem is at a crossroads. While the fintech boom has catalysed a wave of innovation, overconcentration in one sector risks creating imbalances in the broader economy. By diversifying their portfolios, investors can tap into the substantial, yet underexplored, opportunities in agritech, clean energy, and logistics.
These sectors may not promise the immediate returns of a fintech app, but they offer something arguably more valuable: the ability to solve Africa’s most pressing challenges while delivering long-term, sustainable growth. Investors willing to look beyond the fintech frenzy will find themselves not only ahead of the curve but also on the right side of history.
The real question is: Will they have the foresight to seize these opportunities before they become the next overhyped sectors?
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