The African healthcare start-up scene is one of few that has actually seen a positive impact, in terms of funding, from the global COVID-19 crisis. The sector has become one of the highest performing sectors in 2020. While before COVID-19, healthcare had attracted quite a bit of funding, this year, it has attracted even more funding. In 2020 alone, as at October, digital healthcare startups have raised over $90M in disclosed venture funding across 39 deals, which is 87.5% more funding than what they raised in 2019 ($48M, 58 deals). However, in comparison to the other sectors, Healthcare is still wanting and ranks lower compared to Financial Services ($191M).
According to COVID-19 tracker, Africa GeoPortal, the number of COVID-19 cases in Africa stands at over a million and the number of deaths at over 40,000,. The continent’s fragile healthcare system was initially a major cause for concern. However, Africa’s digital health startups are proving that they can fill gaps in service delivery and contribute to the fight against Covid19. Many developers on the continent have banded together to create solutions that will help out Africa’s healthcare system and deliver affordable services to those that need it. Africa’s digital health startups are rising to the COVID-19 challenge, and are actually gaining customers and getting funding while at it.
The number of startups active in the digital healthcare sector on the continent has grown by 56.5% over the last three years, with 180 ventures in operation currently. This enthusiasm is reflected in the funding from investors in the health startups. Todate, startups have raised over $179M across 153 disclosed deals in venture funding. The most funded startup is Egypt’s Vezeeta which raised $64M across 6 rounds, most recent being the $40M in Series D funding, this year. Vezeeta connects patients with healthcare providers and health services. Through the platform patients can search for doctors by specialty, geography, waiting time and insurance, make an instantaneous booking and rate and review the provider and their medical experience. Hospitals can also integrate with its practice management solutions to manage their medical appointments and patient data.
COVID-19 has also challenged Africa’s healthcare startups to better understand their customers. This year alone, many companies across the continent have reacted by reformatting existing services or launching new ones, such as Akili Labs from South Africa, Ilara Health from, WomenChoice Industries in Tanzania and Redbird from Ghana that have addressed specific issues like making affordable ultrasound scanning facilities accessible to all women, AI powered diagnostic services as well as access to menstrual and feminine hygiene products.
This year, many of the digital health startups received Grants for their operations. 5 of the startups received grants from Villgro Kenya. Other platforms launched this year received Seed funding like Emergency Response Africa that received $30K from Accelerator Centre, Tambua Health Inc and Healthlane that both received $150K from Y Combinator. Ghana’s mPharma received $17M in a Series C funding from investor, CDC Group. 54gene received an investment of $15M in a Series A round from Adjuvant Capital.
The hope is that the behavioural changes brought on by the pandemic for both digital healthcare companies and other parastatals last once the coronavirus has been eradicated. However, the longer the virus persists, the higher the likelihood that digital health solutions will be more widely adopted and accepted and could become the new normal. This, in turn, will result in the boom and emergence of more healthcare companies. Currently, there has been an interest in telemedicine, electronic health records, virtual and mobile healthcare among others with multiple countries like Uganda, South Africa, Kenya, and Nigeria adopting these solutions. However these mostly serve patients in the upper echelons of society who can afford to pay for consultations and yet there is a whole other side to society that hasn’t changed.
The CEO of Nigerian startup, mDaaS, Oluwasoga Oni has said that the key challenge now becomes, can startups entice and retain users? And how can digital health business models become sustainable? Indeed, there is no doubt digital health startups will continue to thrive during the crisis, but what happens once COVID-19 is overcome? Given that the healthcare sector falls under basic needs, a steady propulsion even post of the crisis is expected. Whether or not this boom will be sustained post coronavirus is something that only time will tell.