Kelvin Bowoto
According to new Salient Advisory research, women-led healthtech startups in Africa will see a significant increase in investment from investors in 2023.
Kasha, a Rwandan firm; Maisha Meds, a Kenyan startup; and Egypt-based startups Dawi Clinics and Chefaa raised a total of $52 million across 33 deals, accounting for a 2,000% increase in funding to women-led healthtech companies in Africa.
Maisha Meds’ CEO, Jessica Vermon, stated that the company’s funding came from solving problems with a unique business model. “We’re meeting individuals where they initially seek medical care: private drugstores, pharmacies, and clinics. And we are employing technology to make those locations more digital, efficient, and accessible.”
In 2022, women-led healthcare firms raised $2 million across 26 deals, accounting for 1.4% of total healthtech funding. According to the Salient Advisory study, Kasha’s $21 million Series B funding was the highest investment ever made in an African woman-led health technology company. Additionally, support for mixed-gender founding teams increased to 21% in 2023 from 10% in 2022.
According to the Salient Advisory study, these startups’ funding follows an excellent year for the general healthtech field, which got $167 million in 2023. While general healthtech funding was 2% lower than what investors deployed in 2022, it was higher than the overall African tech industry, which suffered a 39% funding reduction.
Women-led enterprises in Africa have historically received little attention from venture capital and private equity investors. However, 2023 was a relatively excellent year for gender financing.
According to data from Africa: The Big Deal, women-led companies generated slightly more than $200 million, representing a +7% increase year over year.
The 2,000% funding increase marks the first time the gender financing gap in health IT startups—and the ecosystem as a whole—has narrowed. The funding amounted to 31% of the overall investment in health-tech businesses in 2023.
Maisha Meds, along with the majority of other women-led businesses, has received investments from global development agencies such as USAID and the Bill & Melinda Gates Foundation. Grants are the primary source of funding for many schools.
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Maisha Meds has secured $5.25 million in scale-up stage 3 funding from USAID Development Innovation Ventures (DIV). Stage 3 grants are DIV’s highest level of support, given to innovators who have proven the ability to scale up their proven solutions to urgent problems.
Grants from organizations such as the Bill & Melinda Gates Foundation, MSD, Cencora, Microsoft, and Chemonics have helped establish women-led firms in health technology and beyond. According to the research, grants accounted for more than half (52%) of the 145 deals for African healthtech entrepreneurs in 2023, demonstrating the importance of grants in filling funding shortfalls for early-stage healthtech innovators. This is the greatest source of grant financing on the continent. However, the total ticket size for grants was only 7% of the cash raised, with an average of $168,000.
Equity investment, in contrast, accounted for 91% of total funding raised, with an average ticket size of $3.2 million. According to experts, women entrepreneurs or CEOs continue to confront difficulties in acquiring private equity or venture capital funding.
According to Ibijoke Faborode, founder of Africa Female Founders Collective (AFFC), these barriers may not be due to investors’ bias against female founders or CEOs, but rather to these women prioritizing things like family over their business, resulting in a lack of visibility for investors.
The AFFC, which was established in February, plans to launch a program in 2024 to assist female founders or CEOs in making more time for their firms and meeting more investors interested in investing in their sectors. The goal is to assist these firms in developing breakthroughs that would make them appealing to investors while simultaneously addressing societal issues.
Vermon stated that the specific women-led firms financed in the DIV round include those that are developing novel models for healthcare delivery, with a focus on the last mile and underprivileged communities.
Amaan Khalfan, CEO of Goodlife Pharmacy, East Africa’s largest private retail pharmacy chain, stated that investors will primarily fund a business with solid record-keeping and the ability to position itself in a way that detects potential in the health tech field.
Jenne Nwoke, founder of Clafiya, a digital health platform that has earned $610,000 in venture capital so far, stated that women-led firms are not receiving as much money from VCs since there is little intentionality in funding women-led enterprises.
According to Nwoke, it would be beneficial if more VC funds were managed by women entrepreneurs. She does, however, emphasize the need for women to be more transparent about sharing financial opportunities.
“For the next funding cycle, I’m going to be more intentional with the investors I want, i.e., finding investors who understand health, consumerism, and finance in Africa or in general,” she said.
Techrectory with Agency Report.
