African Healthcare Innovation: Local Solutions Driving Change Amidst Funding Challenges

When it comes to healthcare across African nations, 2024 brought some significant innovations. The potential exists to bolster Africa’s healthcare industry, but this potential requires fiscal nurturing, according to Salient Advisory’s most recent annual market report. With a significant drop in funding for the startups bringing these innovations to the healthcare market, some peril still exists despite being poised for growth.

In the first half of 2024, investment or funding of African health tech solutions slowed by 36 percent, according to the report from Salient Advisory, a healthcare consulting firm working to advance health tech across Africa. When coupled with other conditions like rapid inflation and high debt payments, the ecosystem is proving unfriendly to new companies and to consumers who struggle to access services. 

The report focuses heavily on over 20 companies using innovation to revolutionize and increase access to healthcare across the continent. Through strategic partnerships and integration, these innovators earned a collective revenue of $200 million, with one generating an unprecedented $50 million. And they’re solving ordering and inventory management issues in Africa’s healthcare supply chain by upgrading processes, strategies and practices. 

“Our reports have historically looked at a larger cohort of innovators with a focus on describing the landscape of innovation,” Abdullah Yusuf, associate director at Salient, told TriplePundit. “This year we focused on a smaller set of innovators who have demonstrated success in digitizing supply chain processes and stand out as leaders within local innovation ecosystems. To get our shortlist, we assessed companies against a set of comprehensive evaluation criteria that looked at each company’s business model, tenure, commercial operations and traction, impact, financial performance and partnerships and stakeholder alignment.” 

Fragmentation of the supply chain across the continent has limited or eliminated access to low-cost, high-quality medical products, according to the report. Africa is a large continent and finding ways to streamline things like distribution by using digital tools, data, and new business models has a big impact. Recent years have seen growing momentum in investments and policies meant to drive local manufacturing, so more innovative distribution systems will be critical in getting medical products to those who need them, according to the report.

“It is clear that entrepreneurs are plugging gaps in healthcare systems,” Yusuf said “Their growing scale speaks to their success. For instance, companies offering order and inventory management solutions now serve around 50,000 pharmacies, hospitals and clinics across the continent.” 

One example of successful growth is Kasha, a company with a tech platform that enables medical product access for consumers, pharmacies, hospitals and clinics. It raised $46 million in equity investment in just eight years. Platforms like Kasha not only streamline access to products, they also create more space in physical service locations. This saves on unnecessary travel and creates income through cost savings. “The commercial opportunity here is incredible,” Yusuf said. “But these innovators also hold the key to solving some of Africa’s thorniest healthcare challenges.”

Kasha initially began as a consumer-focused online pharmacy and has evolved to offer inventory procurement to hospitals and pharmacies. But these evolutions take time. Yusuf said he worries Africa may not be able to afford that time. 

"It has taken innovators a long time to get to where they are today, with the average company taking 10 years to see this kind of success," he said. "We do not want to wait another 10 years for these businesses to scale, which is why we need to promote government partnerships and more support from global healthcare donors to drive scale and impact."

Another key issue innovators may be facing is the need for partnerships with governments and regulatory bodies, Yusuf said.

“We found three key barriers to the formation and scale-up of public-private partnerships: bureaucracy, regulatory hurdles and financial risks,” he said. “While many longer-term reforms and actions are needed to address these, there are some concrete actions that governments and other partners can take now to facilitate greater collaboration with health tech companies.”

The Salient report sends an essential message to the world, Yusuf said. “These case studies reaffirm that it is possible to improve health outcomes using a local, sustainable business mode,” he said. “We want the global health ecosystem to understand the potential scale of this impact and realize that to help solve global healthcare challenges, we need to start local and go global — not the other way around.”