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African Healthtech Players Are Gaining Ground But Hurdles Remain

A strong pan-African ecosystem of Innovators is enhancing the security and effectiveness of health supply chains throughout the continent, according to the latest annual market intelligence study from healthcare consulting firm Salient Advisory.

The “Innovations in Digitizing Health Supply Chains in Africa” report, funded by the Bill & Melinda Gates Foundation, is the first pan-African survey of health supply chain innovators on the continent. It monitors roughly 350 tech-enabled entrepreneurs digitizing supply chain operations in 27 African nations.

During the COVID-19 epidemic, a wave of supply chain innovations arose, but it was unclear how their business models would fare in the long run. Even though the rate of new entries has significantly slowed, Salient Advisory’s research indicates that African governments have formed nearly 50 partnerships with health supply chain innovators, using their tech-enabled solutions to address long-term issues with the accessibility, availability, and quality of health products in public health supply chains.

Governments have a great interest in adopting digital order and inventory management solutions, as evidenced by the fact that over half of the partnerships identified focus on assisting governments to digitize ordering and inventory management to increase efficiency and reduce wastage.

Although the majority of players collaborating with governments are more experienced, like Zipline and mPharma, some younger businesses, including Nigeria’s Figorr and Zimbabwe’s Vaxiglobal, have also developed public sector relationships early on. Government backing for technologies that have a social impact and generate jobs seems to be growing as Africa’s digital landscape expands. The expansion of these alliances is also encouraging for the creation of innovation-friendly policies by governments all over the continent.

“The report offers the first comprehensive overview of tech-enabled health supply chain innovators emerging across Africa. We are surprised – and thrilled – to see so many government partnerships with innovators underway at both national and sub-national levels,” says Remi Adeseun, Director at Salient Advisory. “We urge global health donors, agencies and industry partners to join with governments and investors in supporting high-potential innovators, helping foster more efficient and resilient healthcare supply chains while creating jobs.”

However, the health supply chain innovation ecosystem continues to show disparities in financing trends. While startups have raised USD 2.6 B in funding since their inception, 77% of that sum has gone to US and European e-commerce businesses and companies that use drones to transport medical supplies; the remaining startups have raised USD 584 M.

Even while the government seems to be interested in ordering and inventory management advances, which could provide a road to scale, just 9% of all funding has been raised by firms in this category since their formation.

Plug N Play Ventures and Launch Africa stand out as the most active sources of equity investing in these parts in terms of the number of deals, while the Investing in Innovation program, the Bill & Melinda Gates Foundation, and Google’s Black Founders Fund have given the most awards. However, the 29 women-led businesses operating across Africa (with a concentration in Kenya and Nigeria) still have limited access to equity finance, which forces them to rely heavily on loans and grants.

Additionally, the majority of outside investment has gone to multinational e-commerce giants and companies that use drones to carry medical supplies, who have raised 83% of all reported funding for innovators based outside of the continent. Similar gender financing inequalities may be seen in the 8% of startups that are wholly owned by women who have received only 2% of all reported money over the course of history. Women-led businesses are more likely to rely on grants and debt because they lack access to equity financing.

“African health innovators have demonstrated an impressive ability to utilize technology for the optimization of supply chain solutions and the improvement of access to medicines,” says Hany Abdallah, Senior Program Officer, Supply Chain Systems at the Bill and Melinda Gates Foundation. “We are delighted to witness this progress, particularly as it coincides with an increase in government partnerships, which will advance positive health outcomes. This trend highlights the trust and collaboration between governments and health tech innovators, as well as a shared commitment to driving positive change and fostering innovation within the healthcare sector across the continent.” 

These innovations are primed to offer supply chain solutions to businesses, the government, global health organizations, and other entities on a larger scale as the ecosystem develops. The report urges global health organizations to modify their purchasing procedures to make it easier for innovators to participate in donor-funded supply chains, the development and implementation of trade financing and insurance solutions, and the continued use of grants to support inclusive and efficient innovation ecosystems. Mature innovators should be able to distribute more health products to institutional customers.

Some key findings from the report show that in the West African region:

  • 7% of innovators have established government partnerships in Nigeria and Gabon
  • USD 160 M in external funding has been raised by innovators in the region
  • Nigeria dominates the landscape in Western Africa, with 69% of the 122 innovators headquartered in the region
  • 12% of the companies in the region were founded exclusively by women, while 23% of the companies have a mixed-gender founding team.
  • Nigeria is becoming a crucial market for track and trace innovators, with the National Agency for Food and Drug Administration and Control (NAFDAC) 

Pan-African findings are as follows:

  • Nearly 350 innovators are digitising health supply chains across the continent, headquartered across 27 African countries, with a concentration in Nigeria, South Africa, Kenya, and Egypt.
  • 81% of the companies featured in the report operate exclusively within one country.
  • 35% of companies in the growth and mature stage have partnerships with governments at national and sub-national levels across the continent.
  • 41% of the innovators featured in the report have raised external funding since their founding.
  • Companies founded solely by women received only 2% of reported external funding compared to a significant 91% received by male-founded companies.
  • Francophone African countries house 12% of the healthcare supply chain innovators, while 10% are headquartered outside the continent.

Featured Image Credits: VestedWorld

The post African Healthtech Players Are Gaining Ground But Hurdles Remain appeared first on WeeTracker.

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African Healthtech Players Are Gaining Ground But Hurdles Remain


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