Digital healthcare is gaining momentum on the African continent, attracting more and more decision-makers and investors. This trend is illustrated by the impressive growth in HealthTech startups since 2020. If the covid-19 pandemic has acted as a catalyst, it's because the crisis has revealed that the future of healthcare systems in Africa is strongly correlated with the capacity for innovation of new technologies in this field.
Long before the Covid-19 crisis, other pandemics had revealed the shortcomings of Africa's healthcare infrastructures and supply chains. Some epidemics persist in several regions, and continue to strike the most vulnerable and isolated populations due to lack of access to care and treatment. According to the World Health Organization (WHO), nearly 130 public health alerts were reported on the continent between July 2021 and June 2022, with 86.2% outbreaks of infectious diseases, including polio, declared a public health emergency of international concern. Still according to WHO data, infant mortality rates remain considerably high in some regions, with more than 1.5 million deaths among children under 5 recorded in 2019. Not to mention chronic diseases and pathologies, hitherto under-diagnosed, which are gaining ground and represent a colossal challenge for health professionals, both public and private.
To support the efforts of governments and compensate for the lack of access to healthcare services and medical product supply chains, a new generation of HealthTech players has gradually emerged in this sector with enormous development opportunities, in an Africa that is increasingly connected to the Internet and the world. And in the field of healthcare, this new generation intends to prove that Big Data, algorithms, artificial intelligence or even blockchain, can provide populations with new individualized, personalized and preventive medical solutions.
After decades of international dependence for the supply of medicines and health products, the Covid-19 pandemic has highlighted the urgent need for Africa to build its health sovereignty. However, financial resources, links with decision-makers and support are lacking. This is the finding of a report by Salient and SouthBridge A&I, a preamble to the i3 (Investing in Innovation in Africa) program, which examined the potential of blended funding mechanisms to accelerate the growth and impact of healthcare startups and distributors in 4 sub-Saharan African countries (Nigeria, Kenya, Ghana and Uganda).
An African program, developed by Africans for Africans
But here's the thing: encouraging the next generation of African HealthTech players requires a different approach to what has been done in the past. This is where the i3 program comes into its own. Funded by the Bill & Melinda Gates Foundation and sponsored by Merck Sharp & Dohme (MSD), AmerisourceBergen, Chemonics and Microsoft, among others, this project, which is due to be launched in June 2022 and piloted by Southbridge A&I, Salient and SCIDaR, highlights the most promising African startups with significant contributions to the supply chain of healthcare products and medical solutions across the continent.
60 selected startups from 14 countries, a systematic $50,000 grant for each and the creation of partnership opportunities with the program's sponsors. On the face of it, this doesn't sound like the lion's share of the healthcare market, given the huge investments required in the sector...but that's not what Investing in Innovation is about. It's not just about raising funds, nor is it a classic startup acceleration program. It's about highlighting existing solutions that have a concrete impact on indicators of access to medicines and medical devices, costs, and public health in general, while at the same time shining a spotlight on the difficulties faced by these companies in order to fuel international advocacy.
While the program's funding is mainly international, the initiative remains firmly rooted in the African continent. Program design and selection decisions were made by players in the African tech ecosystem. The i3 Program has targeted the entire continent, and the program coordinators (SouthBridge A&I, Salient Advisory and SCIDAR) have selected four renowned gas pedals, one in each region, to steer the selection of beneficiaries and monitor them over time. For their part, the program coordinators act as a link between the beneficiaries and a unique coalition of backers, alongside industry leaders and African and international institutions committed to the continent's development issues.
Convinced that the development of HealthTech in Africa cannot be envisaged without the increased participation of certain players in the sector who are often left out of the financing networks, the i3 program has made gender equality a condition for its success. sine qua non dans ses critères de sélection des startups, avec près de 47% des entreprises retenues dirigées par des femmes (avec au moins une femme participant au capital et jouant un rôle actif dans la gestion). Autre critère non négligeable : au moins 30% des entreprises opèrent en Afrique du Nord et francophone.
Of the 1,200 digital healthcare companies currently operating in Africa, regional and geographical disparities point to four distinct regional hubs that concentrate 95% of the sector's players: Egypt for North Africa, Kenya for East Africa, South Africa for the extreme tip of the continent, and Nigeria for the western part. Four predominantly English-speaking countries, with regulations that are more conducive to the emergence of innovation, who have taken advantage of market opportunities and networks of influence.
Morocco, the fifth continental hub?
i3's starting point is the realization that the development of successful innovative solutions in an African environment can and must be developed in other countries on the continent in order to grow and realize its potential. Africa is brimming with skills and innovation champions who are committed to finding solutions to the economic, social and environmental issues facing their respective countries, and on a broader scale, the entire continent.
In the Kingdom of Morocco, the program revealed three start-ups with different areas of focus, which stood out during the selection phase. Sobrus, DeepEcho and Medevice have focused respectively on cloud solutions, digital platforms and artificial intelligence to develop medical and supply devices that could make daily life easier for millions of Africans. Representing 10% of the companies selected by i3, they introduce Morocco to the very select circle of African countries mentioned above where digital healthcare is already firmly rooted in local ecosystems.
But before placing their pawns on the continent, where their expertise and know-how can resolutely resonate and meet the specific needs of other African populations, these young startups have a decisive role to play in the development of the Moroccan HealthTech ecosystem, the contours of which began to take shape as early as 2014 with players like Dabadoc, a genuine Moroccan success story. More recently, DataPathology, a Moroccan MedTech startup specializing in digital pathology, has attracted several investors and raised funds (via the WITAMAX program) that have enabled it to become one of the HealthTech players to watch in Morocco and Africa.
But is it enough to fuel hopes for the emergence of a fifth Moroccan hub? This is a legitimate question, given the gap in market access between Moroccan startups and those in other African countries. Of the 27 other startups selected by the program, how many could actually be operational in Morocco? Moroccan talent is far more likely to win business in other African countries than in its own.
In the first cohort selected by i3, we find companies that use drones in their distribution model, some that present financing solutions alongside their supply solution, others that compare prices and offer promotions on medicines, virtual pharmacies that deliver products directly to the population, and telemedicine and telediagnosis startups. In Morocco, all these businesses would have been either classified as illegal, virtually impossible to operate or irrelevant under current pharmaceutical policy.
As a result, the supply chain and the healthcare system in general in Morocco are missing out on major optimization opportunities that could have an impact on the proximity of the healthcare system to the population, on the final cost for the State and patients, and on access to innovation. This, against a backdrop of the implementation of Universal and Compulsory Health Insurance, which should require the system to carry out all pockets of optimization to prevent expenditure from spiraling out of control.
Generally speaking, there are some important prerequisites that need to be put in place if Morocco is to develop as a breeding ground for health tech innovation: greater flexibility and confidence in Moroccan start-ups in terms of public procurement (along the lines of what was achieved during the COVID period), greater liberalization of the pharmaceutical sector, starting with OTC drugs at liberalized prices, and easier financing and payment solutions for health tech players. supply chain médicales. Il s’agit de profiter de la Refonte actuelle du système de santé pour lever les freins à toutes ces innovations, que ce soit dans la réforme du système de soins publics ou dans la nouvelle politique pharmaceutique nationale.
This could enable an ecosystem that raised less than $1 million in 2021, to play in the same league as Nigerian, Kenyan, South African and even Egyptian players, who took nearly 95% of the $153 million raised in the same year.
