Surge in Funding for Women-Led Healthtech Companies in Africa
In 2023, women-led healthtech companies in Africa experienced a remarkable surge in funding, marking a pivotal moment in the industry. According to a recent report by Salient Advisory, these companies collectively raised $52 million across 33 deals, showcasing a staggering 2,000% increase in funding compared to the previous year. This growth is not just a statistic; it represents a significant shift in the investment landscape for women entrepreneurs in the healthtech sector.
Key Players in the Healthtech Revolution
Among the standout companies leading this charge are Rwandan-based Kasha, Kenya’s Maisha Meds, and Egypt’s Dawi Clinics and Chefaa. Each of these startups has carved out a unique niche in the healthtech ecosystem, addressing critical healthcare challenges in their respective markets. Jessica Vernon, CEO of Maisha Meds, highlighted the company’s innovative approach: “We’re meeting people where they first go to get care: at private drug shops, pharmacies, and clinics. And we’re using technology to make those places more digital, efficient, and accessible.” This focus on accessibility and efficiency has resonated with investors, contributing to the funding boom.
A Historical Perspective
The funding landscape for women-led healthtech companies has historically been bleak. In 2022, these companies managed to raise only $2 million across 26 deals, accounting for a mere 1.4% of all healthtech funding. The Salient Advisory report underscores the significance of Kasha’s $21 million Series B funding, which stands as the largest investment ever made in a woman-led health tech company in Africa. This year, funding for mixed-gender founding teams also saw an uptick, rising to 21% from 10% in 2022, indicating a broader recognition of diverse leadership in the sector.
The Bigger Picture in Healthtech Funding
While the overall healthtech funding in Africa reached $167 million in 2023, it represented a 2% decline from 2022. However, this decline is relatively minor compared to the broader African tech ecosystem, which faced a staggering 39% drop in funding. The resilience of the healthtech sector, particularly in the context of women-led initiatives, is noteworthy and suggests a growing investor confidence in the potential of these companies.
Gender Financing Trends
The 2,000% increase in funding for women-led healthtech startups is a significant milestone in narrowing the gender financing gap. This funding accounted for 31% of the total investment in healthtech companies in 2023. Notably, global development institutions like USAID and the Bill & Melinda Gates Foundation have played a crucial role in this funding landscape, primarily through grants. For instance, Maisha Meds secured $5.25 million in scale-up stage 3 funding from USAID Development Innovation Ventures (DIV), which is awarded to innovators who have demonstrated the ability to scale their solutions effectively.
The Role of Grants and Equity Funding
Grants have emerged as a vital source of funding for early-stage healthtech innovators, with over half (52%) of the 145 deals for African healthtech innovators in 2023 being grants. However, despite their prevalence, grants accounted for only 7% of the total funding raised, with an average ticket size of $168,000. In stark contrast, equity funding made up 91% of the total funding, with an average ticket size of $3.2 million. This disparity highlights the ongoing challenges women founders face in accessing private equity or venture capital funding.
Barriers to Accessing Funding
Experts point out that the barriers women founders encounter are not solely due to investor bias. Ibijoke Faborode, founder of the Africa Female Founders Collective (AFFC), notes that many women prioritize family commitments, which can limit their visibility to potential investors. The AFFC aims to address these challenges by launching a program in 2024 designed to help women founders create more time for their startups and connect with interested investors.
Innovative Healthcare Delivery Models
The success of women-led startups in securing funding can be attributed to their innovative approaches to healthcare delivery. Jessica Vernon emphasized that the startups funded in the DIV round are those focusing on unique models that cater to underserved populations. This emphasis on the last mile of healthcare delivery is crucial in addressing the needs of communities that often lack access to essential services.
Insights from Industry Leaders
Amaan Khalfan, CEO of Goodlife Pharmacy, highlighted that investors are more likely to fund businesses with strong record-keeping and a clear identification of opportunities within the healthtech space. This insight underscores the importance of operational transparency and strategic positioning in attracting investment.
Jenne Nwokoye, founder of Clafiya, a digital health platform, pointed out that the lack of intentionality behind funding women-led businesses remains a significant hurdle. She advocates for more women-led VC funds and encourages women to share funding opportunities more openly. Nwokoye plans to be more strategic in her approach to investors, seeking those who understand the nuances of health, consumerism, and finance in Africa.
The Future of Women-Led Healthtech
The landscape for women-led healthtech companies in Africa is evolving, with 2023 marking a year of significant progress. As funding continues to flow into this sector, the potential for innovation and impact grows, paving the way for a healthier future for communities across the continent. The collective efforts of women entrepreneurs, supported by investors and institutions, are reshaping the narrative around gender financing in healthtech, creating a more inclusive and equitable ecosystem for all.