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Africa: Healthcare innovation benefitting from a rapidly growing tech ecosystem

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Africa’s tech ecosystem has grown significantly in recent years, with tech startups receiving $4.77bn in investments in 2021 alone, a 355 per cent increase from the $1.9bn raised in 2019.

The continent is a hub of entrepreneurialism. Before the pandemic, 22 per cent of working-age adults had set up their own businesses.

Headquartered in Johannesburg, South Africa, Founders Factory Africa (FFA) is a corporate-backed investor, venture builder and accelerator on track to build and scale close to 100 tech startups across Africa.

FFA operates a unique early-stage investment model that involves leveraging investment partnerships with leading corporates to back promising Founders with cash and expert, hands-on operational support.

Rajiv Daya is Head of Investments at FFA.

“The African VC market has come a long way and grown exponentially in the last couple of years,” Daya tells Health Tech World.

“I speak to people who were part of the Nordic, Israeli, or Latin American VC ecosystem five or six years ago. They’re seeing those patterns reflected here now.”

But Africa presents some truly unique challenges and opportunities for investors wanting to get in on the ground floor.

The continent’s 54 unique countries are comprised of thousands of languages, cultures, tribes and religions.

To reach these diverse communities, founders have to find innovative ways to plug infrastructure gaps, adding extra layers of complexity that do not always fit with traditional VC funding models.

The internet is helping to connect elements of this flowering landscape. Even though just 22 per cent of Africans have access to the internet, governments, as well as tech giants such as SpaceX and Google, have shown interest in upgrading connectivity through investment.

“We’re starting to build efficiencies. But that only works if you’ve got a platform – in this case, the internet – that allows for those fragmented stakeholders to connect through a digitised, decentralised, disintermediated value chain,” Daya says.

“This can generate really useful data, which allows us to build quicker over time.”

FFA’s startups are finding smart ways to build IP tailored to African markets.

Operating in East Africa, Neopenda (an all-women founded startup) has created a low-cost device that monitors the vital signs of newborns.

The technology is targeted at communities that are otherwise constrained by low nurse-to-patient ratios, patchy internet access and power instability.

Many startups are also working with leading academic institutions to harness talent and get technology to the communities that need it.

“Radiologist Dr. Jaishree Naidoo has partnered with an AI specialist to create a medical imaging business, Envisionit Deep AI,” Daya says.

“Together, they are using AI and machine learning to analyse thousands of  images per minute to highlight high-risk cases using algorithms trained on African datasets but with global application.

“They are undergoing testing and regulatory approvals in conjunction with academic institutions to get to a point of commercialisation.

“Moreover, in South Africa, the University Technology Fund is an example of risk capital helping to commercialise the huge amount of IP and R&D that comes out of strong academic institutions.”

Daya is witnessing an intersection between the sectors represented by FFA, with FinTech playing a key role in driving HealthTech innovation.

Startups developing healthcare solutions for an African market are often marketing to people without the financial means to access that solution. To overcome this, many build a financing component into their platforms.

“FFA investee company, Fleri, enables expats to finance healthcare insurance products for family back home on the continent.

“Building adjacencies on top of a core healthcare offering provides what is probably taken for granted in other markets.”

As digitisation expands across the continent, Daya hopes to see a balancing out of FFA’s startup offerings.

Rather than focusing purely on access to products/services for reactive healthcare outcomes, innovators can be more proactive and begin to leverage the data currently being generated within healthcare and digital ecosystems to build preventative solutions.

He cites recent investment Infiuss Health, which gives large pharmaceutical and global health organisations access to African clinical participants to generate invaluable datasets that are more reflective of the underlying population.

“These companies see the value in understanding populations and datasets a lot better. So, decentralising that whole process of accessing data is extremely powerful.”

recent report by Salient Advisory revealed a huge influx of companies working with community pharmacies to digitise customer distribution.

Maisha Meds, for example, grew from 400 to 900 registered outlets in Kenya and Nigeria, while Lifestores Healthcare increased from 85 to 600 outlets in Nigeria.

Daya says:

“We’ve got startups in our portfolio who work with pharmacies to provide them with rapid diagnostic tools, ERP systems, financing solutions, fulfilment tools and digitisation tools to alleviate some of the bottlenecks that exist at centralised institutions like hospitals and clinics.

“At the same time, they are working backward to coordinate with other startups who are developing IoT devices to track delivery from a wholesale distributor to a pharmacy.

“And, you now have various actors along the value chain beginning to speak to each other through the effective use of technology, which ultimately then feeds back into big pharma.

“It’s really interesting and inspiring to see all these elements coming together.”

This is an excerpt from our Special Report – Global Health Tech Clusters

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