In a timely boost, the Judith Neilson Foundation and Million Lives Collective (MLC) launched the African Cities Innovation Fund in Nairobi, offering up to $75,000 in non-equity grants for tech-enabled urban solutions. Unveiled on December 3 but gaining traction today through partnership announcements, the fund prioritizes AI-driven tools for transport, climate resilience, and basic services in fast-growing cities like Lagos and Johannesburg. “Venture funding for civic and climate tech has cooled, but grants can ignite the pilots that attract follow-on VC,” said MLC’s executive director, emphasizing Africa’s $2.2 billion tech investment dip in 2024.
Complementing this, a South Africa-Morocco healthtech consortium secured $1 million in pre-seed funding led by Philips Foundation, Johnson & Johnson Impact Ventures, Sanofi’s Global Health Impact Fund, and MIT’s Solve initiative.
The unnamed startup deploys AI for teleradiology, aiming to bridge diagnostic gaps in remote communities across North and Sub-Saharan Africa. “This funding will enhance AI reporting and expand access to radiology in underserved areas,” a spokesperson noted, targeting a 30% reduction in misdiagnosis rates within two years. The deal, tracked in Launch Base Africa’s latest startup roundup, reflects a 20-30% YoY uptick in health AI investments.
These grants echo Meta’s Llama Impact Grants from September, where five African AI startups two from South Africa, and one each from Nigeria, Rwanda, and Uganda each pocketed $20,000 for open-source Llama-based projects tackling regional issues like agricultural forecasting and financial inclusion.
Sector Shifts: From Fintech Dominance to AI-Infused Resilience
The funding rebound isn’t just about volume; it’s reshaping priorities. Analysts at Afritech Biz Hub predict AI and deep tech as Africa’s “fastest-rising niche,” with climate and mobility sectors eyeing 20-30% growth in 2026. Fintech still leads, but AI integrations like predictive analytics for supply chains are eroding its monopoly, as seen in September’s $28 million SaaS wave.
Standout recent rounds include:
NeedEnergy (Zimbabwe): Secured €450,000 (~$486,000) from EEP Africa and $1.1 million total via Gaia Impact Fund for AI-virtual power plants, addressing energy shortages in off-grid regions.
Rology (Egypt/Kenya): In talks for a $3 million Series A from Japanese investors Nissay Capital and Inclusion Japan, plus $7 million already raised, to expand AI-radiology into Nigeria and Ghana.
Zuri Health (East Africa): Targeting $4 million in seed funding backed by Bayer, focusing on WhatsApp-based AI telemedicine for rural areas.
Broader ecosystem plays are also accelerating. A World Economic Forum report today spotlights “green computing” investments, estimating $1.5 trillion in unlocked value by 2030 through affordable GPUs and sustainable data centers. Initiatives like Nairobi’s IXAfrica-Safaricom partnership and Cassava Technologies’ 12,000-GPU NVIDIA deployment are pooling resources via GPU-as-a-Service models from startups like Udutech, easing compute barriers for cash-strapped innovators.
Challenges and the Path Forward:
Despite the optimism, hurdles persist: Q3’s $14 million AI haul mere 0.03% of global funding highlights dependency on foreign cycles, with 63% of 2,400+ AI firms stuck in early stages. Geographic skew (Kenya’s $242 million lead) and infrastructure woes like USD-denominated cloud costs squeeze margins. Experts urge revenue-based financing and African-led VCs to foster ownership.
As Brian Waswani Odhiambo of Novastar Ventures noted at GITEX Nigeria, “We’re optimizing for unit economics from day one.” With $3.2 billion raised over the past year a 50% rise today’s grants and rounds affirm Africa’s AI shift: from imported hype to homegrown engines of growth.
If sustained, this “utility-first” trajectory could mirror Latin America’s efficiency rebound, positioning the continent not just as AI users, but builders.
