Persistent secures initial $52 million for African climate technology fund

The Mauritius-domiciled investment vehicle targets early-stage startups in the energy and agriculture sectors, utilizing a risk-mitigation structure to attract private backers.

Persistent, an organization operating as a venture builder, a business model that actively creates, funds, and develops startups by providing shared resources and operational infrastructure, has announced the initial close of its Persistent Africa Climate Venture Fund.

The firm focuses on climate-tech, a sector comprising technologies explicitly designed to reduce greenhouse gas emissions or address the impacts of global warming. The new fund has a total target of US$ 70 million and has secured US$ 52 million in its first close. Alongside the main fund, the firm introduced an initial US$ 5 million Venture Building Facility.

The investment vehicle is domiciled in Mauritius and directs its capital toward early-stage companies operating within Africa's energy, agriculture, and resource sectors. The fund's primary strategy involves financing startups from the pre-seed stage, which represents the earliest funding phase used to launch initial operations, through to Series A, which is typically the first major institutional investment round aimed at scaling a functioning business model. The fund also maintains the capacity to provide follow-on capital for portfolio companies at later stages of their development.

Structurally, the fund utilizes a blended finance model. This economic approach combines capital from development or philanthropic sources with private investment to encourage commercial participation in emerging markets. Within this framework, the fund offers private investors first-loss protection, a mechanism where a designated entity agrees to absorb the initial financial losses if investments underperform, along with priority return protection. This financial structure is paired with the US$ 5 million Venture Building Facility, which is designed to fund the customized operational and administrative support Persistent provides to the startups in its portfolio.

The founders of Persistent stated that reaching this initial funding milestone indicates that early-stage climate businesses in Africa present viable investment opportunities at scale.

“Achieving the first close of the Persistent ACV Fund is a strong show of confidence in Persistent and the fund’s strategy,” the founders said. They acknowledged the contributions of their Limited Partners (LPs), which are the investors who supply the fund's capital but do not partake in its daily management. The founders noted that aligning catalytic capital, investment funds that are highly risk-tolerant and primarily impact-driven, with traditional commercial capital is necessary to address the region's climate financing gap.