After raising $3 million to fund African climate tech startups, Josh Romisher thinks he can solve the sector’s biggest problem: the lack of exits. His approach has become popular among African tech investors: they write cheques at deliberately low valuations so as not to price out eventual buyers.
Romisher, the general partner at Holocene, a South-African climate tech venture capital firm, said he has raised $3 million from 32 investors, 60% of them based in Southern Africa, and has deployed most of it across 11 investments in cheques of $100,000 to $200,000.
Holocene buys a 10% to 20% stake in each startup while its valuation is still low. If Holocene pays little going in and gets a sizeable piece of the company, even a modest sale later can create outsized returns. If a company is acquired for $30 to $50 million, his stake can return 20 to 30 times what he put in.
With this math, Holocene is not trying to build the next billion-dollar climate company in Africa but is trying to build several worth $30 to $50 million each and sell them within three to five years.
Holocene’s portfolio is roughly 60% Southern Africa, 20% Kenya, and 20% Uganda, weighted toward energy and e-mobility, according to Romisher, with companies including Yongeza Capital, an e-mobility charging infrastructure player; ScootHero, a two-wheeler delivery company; and circular-economy retailer FARO.
