Health consulting company Important Advice has released its latest Insights Report, presenting findings on funding activity covering grant, equity and debt investments for African healthcare startups in 2023.
Titled “2023 RoundUp: Investments in African HealthTech“, the report provides analysis on funding trends in African health technology ecosystems. It provides information for key stakeholders in governments, investors, donors and global health organizations and is funded by the Bill & Melinda Gates Foundation.
Driving The News
While investment in African startups plummeted last year, mirroring global trends, healthtech has shown resilience, experiencing only a 2% drop. compare to an impressive 39% drop. in the wider ecosystem.
The number of deals in African health tech increased by 17% year-on-year (y-o-y) to 145, with total funding of $167 million and an average ticket size of $1.1 million. In total, 114 innovators received funding in 2023, while 23 received multiple investments within the year.
Digging deeper
The number of deals for women-led companies remained relatively stable (26 in 2022 vs. 33 in 2023), however, the amount of funding saw a dramatic change as the gender gap narrowed significantly: women-led companies secured funding 52 million dollars – 31% of all investments in 2023. This represents a 2000% year-over-year increase compared to the $2 million (1.4%) they received in 2022.
Online pharmacy solutions attracted most of the investor capital, garnering 38% ($63 million) of the total funding raised, thanks to Kenya’s Series B funding rounds Kasha ($21 million) and MyDAWA ($20 million) ), along with Egypt’s Yodawy ($16 million). Electronic medical record solutions were the second-best funded category, led by Helium Health’s $30 million Series B funding round.
“The resilience of African health innovations shines through in the findings of this report. Amid difficult headwinds, these innovations continue to demonstrate commercially viable models that have the potential to improve access to healthcare and deliver impact at scale.”
Yomi Kazeem, Engagement Manager at Salient Advisory
Digging deeper
Equity investments accounted for 91% of total funding with an average deal size of $3.2 million. This significantly outpaced grants, which contributed only 7% of the fund with an average ticket size of $168,000. However, grants still play a critical role in enabling innovators to access early-stage funding to test and validate their business models. Debt financing remains rare, with only one debt-based investment tracked in 2023.
Although still rare, M&A activity has doubled in the past year with four major deals. The outlook for future funding also appears strong as, despite broader economic headwinds suggesting a slowdown in funding for tech startups, more than $600 million in new funding was announced by investors interested in African health systems.
What they say
Speaking about the launch of the exhibition, Yomi KazeemEngagement Manager at Salient Advisory, commented:
“The resilience of African health innovations shines through in the findings of this report. Amid difficult headwinds, these innovations continue to demonstrate commercially viable models that have the potential to improve access to healthcare and deliver impact at scale. Increased funding for female founders is a high point and, in the coming years, investors must prioritize retention strategies that ensure equitable funding among founders.
Dr. Analía PorrásDeputy Director, Global Health Agencies and Funds, Bill & Melinda Gates Foundation, also commented:African health technology has proven resilient over the past year, with innovators receiving investment to test, validate and scale solutions that have the potential to transform health systems across the continent. We are happy to play a role in providing innovators with risk-tolerant capital through it Investment in Innovation Program and we hope to see the current resilience translate into increased confidence and funding from investors and donors.”
To download the full market intelligence report, click here.
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