Africa’s population is likely to increase from 13 percent of the global total in 2000 to close to 40 percent by the end of the century.
While a boom in population can come with massive risks, such as food or housing shortages, Abby Stern and her fellow cofounders at Holocene Ventures see it as an opportunity. Africa currently hosts around just 1 percent of installed solar PV capacity, but the continent is home to around 60 percent of the best solar resources globally. And it is estimated that 70 per cent of buildings that will exist in Africa in 2040 are still to be constructed. Abby’s team is dedicated to unlocking Africa’s potential by working with startups and entrepreneurs to leverage the right technologies to help the continent grow sustainably. Holocene’s mission is to invest in climate tech companies—only in Africa, with only early-stage organizations and those focused on fighting the climate crisis.
Our conversation has been edited for length and clarity.
Clairissa: Can you tell me about your transition from living in the United States to living in South Africa?
Abby: Growing up, I always felt a connection to Africa because my dad is South African. After meeting my now-husband (and Holocene co-founder Josh Romisher) at Stanford Business School, he began commuting back and forth to East Africa for his work in solar energy. While he was spending weeks at a time in Africa, I had still never been there. We took a trip to Rwanda and Tanzania after graduation, which sparked the idea of potentially calling Africa home. We ended up moving to Uganda for Josh’s work. A year later, we decided to move to South Africa after falling in love with the country’s epic beauty and because of my personal heritage. In South Africa, we found that we could do incredibly impactful work in a culture that resonates with us, and, after five years, we have no plans to leave.
Clairissa: That sounds amazing! Tell us a little bit about the professional transition that came along with moving to South Africa.
Abby: Before moving to South Africa, my whole mission was to make food better, more affordable, and more accessible for everybody, but mostly focused on the US and Europe. My husband was excited about solar and finding solutions that were providing a public good but were also commercially viable. We both knew that we needed to find a professional mission in South Africa through which we could continue to have a personally meaningful positive impact.
We transitioned from operating companies to helping to build them, and we ended up running Stellenbosch University LaunchLab, an incubator and entrepreneurial platform at one of the continent’s top universities. We started building an entrepreneurial community to help people connect their ideas with talent and funders, and provide the programs and coaching needed to build local startups as well as events and workshops to foster innovative and entrepreneurial mindsets. Our inspiration was Stanford’s d.school [the Hasso Plattner Institute of Design], where Josh and I met, and our vision was to bring design-thinking-inspired business building to southern Africa. We loved being able to use our operational experience and global perspective to help to build and scale enterprises as well as to coach these entrepreneurs and create a dynamic community. However, we wanted to add more capital investment into what we were doing and narrow our focus on one of the most vexing problems of our time: climate change. So venture capital investment in climate tech was a perfect next step.
A year ago, we spun out a climate incubator that we had started at LaunchLab into Holocene Ventures. We invest in early-stage climate tech companies in Africa, giving them not only financial capital but also human capital in the form of our services. We sit side by side with the founders to help them reach a level of scale that they couldn’t get to on their own.
And then we also have the community side, where we really try and bring people together—including in nature—and spread ideas. We want to build up skills within the local climate tech community so that more people can be working on this problem. This investment in business building and community building is really unusual for a venture capital firm.
Clairissa: That’s a lot of change in a short period of time. How did you handle that?
Abby: I am not somebody who traditionally is good with a lot of unknowns. In retrospect, the journey makes sense. We went from operating to incubating to business and community building, and now into investing. However, in the moment, I had to trust my gut, try to move toward what I was passionate about, and be OK with making trade-offs based on my partner’s and family’s needs. Over time, I’ve become much more comfortable with the idea that we’re going to figure it out—and I’ve found solace in knowing that no decision is permanent. It can be stressful, but you just need to put one foot in front of the other and understand that you can’t always know what’s going to happen. If you keep moving in a direction you believe in and look up to reevaluate regularly, you’ll minimize fear on the front end and regret on the back.
Clairissa: How would you describe Holocene, and what is the meaning behind its name?
Abby: I’m not a scientist, but in geological terms the Holocene is the era in which we and all the life that we see around us proliferated. It had the perfect conditions to allow plants, animals, and humans to evolve in the way we have. And it’s the beauty of our environment that inspired us to choose that name. We don’t want to mess that up.
At Holocene, we want to focus on the opportunity within this continent and the things that inspire us. Because neither my husband nor I find fear motivating. Fear can make you myopic—you’re just operating in order to survive. And that’s not the way we’re going to come up with the most creative and innovative solutions to solve the massive challenge that is climate change. We want to flip that narrative. You’re most creative when you see possibility, when you’re excited, and when you’re motivated. At base, we are a group of nature enthusiasts.
Clairissa: Why start this business in South Africa? What opportunities have you seen?
Abby: From a climate perspective, this question comes up a lot. Africa can be a big unknown for many people. Here’s what people need to know. The population is growing incredibly fast. About 18 percent of the world’s population is in Africa right now, but that’ll rise to almost 40 percent by the end of the century. That 18 percent are currently using only 6 percent of the world’s energy and emitting only 3 percent of the world’s CO2 emissions. If Africa develops the way the rest of the world has, GHG emissions will go up immensely.
If we focus only on climate tech solutions for the Global North, we’re going to miss the massive increase in consumption and population on this continent, which risks nullifying all the work that’s been happening elsewhere. So that’s why Africa’s really important, especially within climate tech.
There’s a lot of interest from development finance institutions and other global organizations about investing in Africa. A lot of it’s on the adaptation side, as organizations see subsistence and smallholder farmers being negatively affected by climate change and people being displaced by natural disasters. And that’s absolutely true: We do need investment in adaptation.
But we also see a massive opportunity in mitigation and coming up with technologies on the continent for the continent, especially within southern Africa. There are amazing entrepreneurs here that are developing incredible technologies as well as great universities. We have incredible potential here; we just need to really be able to leverage the right technologies—solutions for Africa from Africa.
Clairissa: You’re saying the collective “we” have an opportunity in Africa to do things the right way from the start?
Abby: That’s exactly it. For us, it’s about leapfrogging, but it’s also about making sure we don’t develop the way the rest of the world has. Africa 100 percent needs to grow economically, and it’s on that trajectory, but we need to do it in a different way—one that is more environmentally friendly than what has been done in the past.
Clairissa: What technologies are we talking about? What are you investing in or urging people to invest in?
Abby: It can be hard for people who aren’t based here to know how to invest and be part of the ecosystem. Holocene aims to be the bridge between Africa and people that want to do impactful work and make impactful investments but don’t feel as if they have the connection to the continent yet.
Currently, our portfolio is about 60 percent geographically located in South Africa and 40 percent pan-African. In terms of the actual technologies, the area we’re most excited about is energy. South Africa has one of the biggest grids in the world, but it’s also breaking, with failings in infrastructure, power generation, and reliability. With all the renewables coming online, we have an opportunity to fix it in a much more sustainable way.
E-mobility is also a big one for us. We have a company developing charging stations and charging optimization software for electric fleets, as well as an EV company in Kenya that’s building battery-swapping stations for electric motorbikes, which are used for a lot of transportation and taxis and delivery in East Africa.
We’ve invested in other areas too, such as food, biotech, and agritech. We have one company that started out developing cultivated meat from local animals and has now transitioned into focusing on developing African species cell lines so other companies can use these unique, biodiverse cells for biomedical innovation, vaccine development, cosmetics production, and foodtech—including, in the future, cultivated meat. We also have companies involved in precision agriculture leveraging AI and drones to increase yields while minimizing inputs. We’re also looking into nature tech, including the potential to use land as a carbon sink, as well as the creation and trading of carbon credits.
Clairissa: Who is your audience? Is this something an average person like me could invest in?
Abby:
We’ve seen that many of the African climate angel investors are previous entrepreneurs or other professionals that have some tie to Africa and/or share the vision of the continent’s entrepreneurial potential. They either invest directly into companies or into a fund. That fits the profile of many of our Holocene Ventures Fund investors, who put a smaller amount of cash into a diversified portfolio while also learning about climate tech in Africa with on-the-ground experts. I am also personally focused on catalyzing more representation from women in both the investing and entrepreneurial side of African climate tech, as the numbers for both are currently extremely low. I’m actively putting together a group of amazing women investors who are passionate about climate impact and will help pull in more women founders and leaders. I want climate tech to lead this push for more investment into women on the continent.
Clairissa: We’ve talked about the investors. Can you tell me a bit more about your climate tech entrepreneurs and their journey?
Abby: It’s a hard journey for any entrepreneur. There’s not a ton of capital flowing—we’re the only climate-tech-focused VC in Southern Africa—and there also isn’t a ton of expertise, which is why we invest in human capital as well as provide finance.
On top of that, our market isn’t as developed as others, which means that entrepreneurs have to do many of the things themselves that others might do elsewhere. If you build hardware, for example, you might also have to provide software, consumer credit, delivery and servicing. From a financial, talent, and capacity perspective, it is very tricky to own all of these parts of a value chain and combine these various offerings and business models into one. To help address this problem, we specialize in “blended finance” or the “climate capital stack.” In an environment in which local government funding isn’t as plentiful, we help our entrepreneurs navigate how to strategically leverage private and international capital to fund their business. We help them secure grant funding for research and development, debt funding for hardware, and VC funding for software and scaling. We try to bring all of these different players together as well as help companies with their financial strategy.
To survive and then scale in this context, small companies need capacity, expertise, and strategy, as well as finance. That’s a lot for a company that’s just getting started, and it’s why our services are so valuable—particularly in the early stages.
Clairissa: What’s your ultimate vision for Holocene?
Abby: We really want to make the early-stage climate tech ecosystem super robust and truly pan-African. We want to find ideas that haven’t yet even been dreamt of that help Africa lead the world in sustainable growth and help those ideas and entrepreneurs to thrive, rather than wither on the vine for lack of funding. That’s our big-picture vision.
Behind the scenes
This interview is part of LEFF’s Into the Weeds interview series—a series that amplifies individuals whose work contributes to the achievement of the SDGs at every level. We’ll bring you insights from renowned experts and the leaders of global organizations and innovative local businesses. Clair Myatt (she/her) is the manager of LEFF Sustainability Group, for which Katie Parry (she/her) is the director.
Comments and opinions expressed by interviewees are their own and do not represent or reflect the opinions, policies, or positions of LEFF or have its endorsement.
