Funding for e-health startups is not as robust as fintech, e-commerce, and other sectors but is “still sparse”. This is according to The State of Health Tech in Nigeria report by TechCabal which goes further to note that in 2017, fintech received nearly six times more funding than Health tech.
In recent times, Africa's tech industry has seen a boom in terms of funding, although some areas of tech are more popular than others. Healthtech is one of the less popular areas. From 2014 to 2018, Health tech raised $7.88m in funding whereas, fintech secured $462m between 2018 and 2019. 2020 was a good year for health tech but it still trailed. While fintech accounted for 31% ($407m) of the total funding received, health tech got $117m (9% of the total funding received).
The low amount of funding for healthtech startups can be attributed to the lack of proper regulation in the industry. African governments are new to the presence of technology in the healthcare industry, because of that, most of the regulations in place are meant for traditional health care systems and are not specific to the needs of health tech startups.
Also, the continent’s poor digital economy makes operations difficult for the startups, they also had a hard time convincing investors that their businesses were going to last long. But regardless of the problems facing operators in the health tech industry, their contributions during the pandemic have been invaluable.
Tele-medicine startups like Nigeria’s Helium health and Kenya’s Ilara helped to bridge the gap between doctors and patients during the lockdown, while 54Gene provided mobile laboratories to increase the capacity for COVID-19 testing.
As a result, investors are gaining more interest in the health tech industry. It’s just the beginning of the year and two startups have received significant funding.
Is the future looking bright for health tech startups? Yes, but it depends on African governments putting in the work to fix up the healthcare industry as this will in turn support an enabling environment for health tech startups.
Get TechCabal’s Go deeper: reports here and send us your custom research requests via firstname.lastname@example.org.