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Key sectors for Africa-focused investors to watch in 2025

Profile photo of Boyewa Abiodun-Adepoju
Written by
Boyewa Abiodun-Adepoju
·
February 20, 2025

As global markets evolve, investors are increasingly turning their attention to high-growth sectors that blend tech innovation with societal impact. The VC4A Venture Showcase, a flagship program for scaling startups in Africa and Latin America, has consistently highlighted emerging trends and sectors poised for disruption. With over USD 850M raised by 95 tracked ventures and a 65% success rate in securing investments, the program has offered a lens into the future of tech-driven markets. Drawing from past editions and global data, here are 5 key sectors that we anticipate will dominate investor portfolios in 2025.

Climate Tech: Renewable energy and sustainable infrastructure

In partnership with AEDIB|NET, the 2023 VC4A Venture Showcase highlighted startups advancing CleanTech, Climate Smart Agriculture, Smart Cities and Digital Trade, key sectors that were pre-identified as the digital innovation priority:

  • IEA projects a 50% increase in renewable energy capacity in Africa by 2025, driven by solar and wind investments. With Africa’s electricity demand projected to increase by 75% by 2030, there is an opportunity to get involved in the growth of this sector.
  • Despite significant gaps, ClimateTech surpasses FinTech as the top investment sector in Africa according to Africa Sustainability Matters, raising USD 413.9M as of September 2024. That comprised one-third of investments received by African startups in 2024.

HealthTech:

Post-pandemic, HealthTech continues to help bridge healthcare gaps. VC4A’s collaboration with HealthTech Hub Africa spotlighted innovations that create virtual health, virtual care, data and health, and climate and health solutions in Africa.

  • Partech reports a loss in funding for HealthTech YoY 2023-2024. However, Healthtech and Mobility still attracted over USD 50M in Africa in 2024.

Artificial Intelligence (AI) and Machine Learning (ML)

cWhile the transformative power of AI is already clear, 2025 will see its democratization in emerging markets. Startups are moving beyond generic models and are now building context-specific tools that address regional challenges, and investors are particularly interested in such applications.
Trends to watch: AI for hyper-local problem-solving and SME adoption.

This includes:

  • Edge AI: Lightweight, offline-capable AI systems for rural healthcare (e.g., diagnosing crop diseases via smartphone cameras).
  • Local-Language NLP: Learning tools like Swahili or Yoruba chatbots for financial literacy training, breaking language barriers in education and banking.
  • AI-as-a-Service: Affordable, subscription-based AI tools for SMEs to optimize inventory, customer service, and fraud detection.

AgriTech: Food security

AgriTech is at the heart of Africa’s push for food security and climate resilience. Startups are leading the charge with precision farming tools such as drones and IoT sensors that monitor crop health in real time, while satellite imaging tracks land use changes, Farm-to-Market platforms, and climate adaptation, helping farmers address erratic weather conditions.

  • The primary driver of this sector’s growth is the urgency. A significant percentage of Africa’s population depends on agriculture, yet productivity and funding lags behind global averages, increasing the need for critical investor support.
  • The African Development Bank projects that Africa’s food and agriculture market could expand from $280 billion annually to $1 trillion by 2030. Realizing this potential necessitates substantial investments to address current productivity gaps and support sustainable growth.

FinTech:

Fintech’s first wave brought mobile money; the next will blend blockchain, AI, and policy innovation to serve the underserved, with Decentralized Finance (DeFi)i, embedded finance (for AgriTech), and opportunities to test innovations within regulatory conditions, reshaping access to finance.

Trends to watch:

  • DeFi for Gig Workers: Platforms offering collateral-free loans based on alternative credit scores (e.g., using ride-hailing app transaction histories to establish a user’s creditworthiness).
  • Embedded Finance: Pay-as-you-go crop insurance bundled with agritech apps, or health coverage integrated into telemedicine platforms.
  • Cross-Border CBDCs: Central Bank Digital Currencies (CBDCs) are being explored in Africa to enhance cross-border payments, and remittances while aiming to reduce transaction costs.

Africa and other emerging markets present a wealth of opportunities for investors seeking high-growth potential and innovative solutions. For investors, the key is to identify startups that leverage local knowledge, resources, and innovative technologies to create sustainable and scalable solutions that also align to their ethos. Investors can continue to come together to contribute to the economic development of the region while achieving substantial financial returns.

As we navigate through 2025 and the global investment landscape continues to shift, Africa is poised to become the next hotspot for innovation and growth. Investors who recognize this potential and act decisively will be at the forefront of the next phase of investment success from the continent.

To capitalize on these opportunities, consider joining the VC4A Investor Network. As the leading platform connecting startups in emerging markets with global investors, VC4A offers a curated selection of high-potential ventures across various sectors. By becoming a member of the VC4A Investor Network, you gain access to:

  1. Exclusive deal flow: Discover pre-vetted investment opportunities from a diverse range of sectors.
  2. Access to networking events: Participate in exclusive events and webinars to connect with fellow investors and entrepreneurs.
  3. Investment tools: Utilize VC4A’s suite of tools to streamline your investment process, from due diligence to portfolio management.

Join the VC4A Investor Network today and be part of investment success stories in Africa and emerging markets, drive innovation, create jobs, and impact on economic growth.

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