Africa’s e-health sector is experiencing slow but steady growth, but there future looks bright as bottlenecks are unblocked and startups achieve scale.
Investor interest in Africa’s e-health sector has trundled along at a pretty stable rate over the past three years, but there are signs of growing interest.
According to the most recent African Tech Startups Funding Report released by Disrupt Africa, 10 e-health startups raised a total of almost US$9.5 million in 2017. This figure was slightly up on the total raised in 2016 – US$8.36 million.
Rob Heath is principal at South African investment and advisory firm HAVAIC. He says the reason why funding has been tough to come across for African e-health startups is that Africa still has a short supply of technology professionals that can take products that last mile.
“There are significant environmental and regional advantages for Africa in health-tech, but I think the bottleneck has been decent supply of technology experts – the quality is good, there are just not loads of them – and also lack of professional investors that can add real value,” said Heath.
However, the size of the African population and the myriad of problems faced by healthcare sectors on the continent mean there is an undeniable opportunity for e-health companies that manage to reach scale.
Nic Klopper is chief executive officer (CEO) of South Africa’s hearX Group, which develops smartphone-based hearing solutions. He says there are various African markets that need to be disrupted since current healthcare models and systems do not serve the majority of the population.
“Therefore, e-health solutions are changing the way in which healthcare models are reaching those people at a grassroots level,” said Klopper.
“Clinical and traditional solutions are not meeting the requirements in our African market since they are prohibitively expensive and static, and hence unable to assist with decentralised healthcare programmes.”
There remains a need in Africa for solutions that are mobile, cost-effective and easy-to-use in community settings, he said.
Heath agrees, saying high-end technology APIs and services can be used for a fraction of the price of a few years ago.
“Artificial Intelligence plugins, web-hosted servers, and natural language processors can turn good ideas into products very quickly and affordably,” he said.
Once these products have been developed, Heath said their potential is clear to see.
“In a resource and infrastructure constrained environment, anything that increases efficiency and reduces costs will add value and have traction. The second and larger potential is when the opportunity becomes international,” he said.
Yes, that’s right. Even though African health-tech startups are generally solving local problems, they could still have international relevance. Heath explains why.
“The data they are now extracting is significantly valuable. This helps with epidemiological and medical research, but also provides a platform for machine learning and providing test data for international markets,” he said.
“Zipline [Rwanda-based blood delivery service that utilises drones] could apply to the American Aviation Authority to get a drone delivery licence based on its data from Rwanda, or use its technology in a disaster relief zone. Vula Mobile [South African diagnostics app] may be able to use its data and image rich case database from rural parts of South Africa to diagnose a multitude of ophthalmological and other referred cases using Artificial Intelligence.”
The amount of available funding will increase to allow startups to reach this kind of scale, says Siraaj Adams, CEO of Digital Health Cape Town, a dedicated e-health accelerator programme.
“Social media is aglow with various incubators, nominations for awards and conferencing within the space. Investors have previously saturated the market in the fintech space, and e-health is a sector that is now getting the much-needed attention it needs,” he said.
Klopper says this increase in interest in e-health investments can be attributed to the growing need for decentralised healthcare access, something the e-health market offers.
“Interest in e-health investment is on an increase due to increase in market adoption and opportunity for market disruption,” he said.
“An increase in adoption from the market, results in higher investor confidence.”
Adams is optimistic for the future, with opportunities for e-health startups becoming more prevalent and more applications of digital health solutions unfolding.
“Startups within Africa find solutions for specific issues within their immediate environment. These issues, however, are experienced outside of their terrain too, and positive impacts can be far reaching. Scalability with the right backing can become a reality to them,” he said.
“Most of the applications have social impact and can alleviate bottlenecks and challenges the departments of health experience, as well as the private sector.”