The African e-health ecosystem is thriving, with COVID-19 encouraging even quicker uptake in a sector that was already on the rise. Yet the future prospects of the space remain a little unclear.
The good news is certainly plentiful. According to the High Tech Health: Exploring the African E-health Startup Ecosystem Report 2020, released by Disrupt Africa last week, the number of e-health startups operating in Africa has increased by more than 50 per cent to 180 in the last three years.
Meanwhile, funding has also been on the rise, with 2020 a breakthrough year for health-tech investment. So far this year, e-health startups have raised over US$90 million, accounting for more than half the total amount of funding raised in the sector since Disrupt Africa started counting in January 2015. Standout rounds were raised by the likes of Vezeeta, mPharma, 54gene and Helium Health.
Uptake of telemedicine products had been gradually increasing over the years, but the COVID-19 crisis has made African health-tech startups much more relevant very quickly. They have risen to the challenge. Various healthcare-focused startups across the continent have reacted to the crisis by reformatting existing services or launching new ones, such as Kenya’s Ilara Health, Cameroon’s OuiCare, and Ghana’s Redbird.
Continent-wide, COVID-19 is spurring uptake of e-health solutions, with patients asked to stay home and worried about going to their local, crowded health facilities. Healthcare organisations have also turned to tech to ease the adaptation to the “new normal”, adopting practice management and virtual healthcare platforms.
A host of health-tech founders told the latest episode of Disrupt Podcast that COVID-19 had spurred rapid increase in uptake of their services, meaning it is one of the few sectors that is in the short-term at least benefitting from the crisis. The fact that the crisis has accelerated behavioural change that was already in evidence is a reason for serious optimism.
The question, however, is to what extent the change induced by the pandemic lasts once the coronavirus has been overcome. Will these short-term behavioural changes signal a paradigm shift? The answer to this may well be a resounding “yes”. And all the signs are that traditional challenges around funding are being overcome. But challenges remain.
Key among these challenges is the lack of spending power among low-income target markets, which will remain the case, and perhaps even be exacerbated, post-pandemic. It could be that some types of startups, such as bookings platforms targeting middle-income segments, stand to gain, while those focused on segments with less spending power remain as precarious as before. Those that can entice and retain users, and make digital health business models sustainable, will, as ever, succeed. Whether or not COVID-19 will impact that long-term is unclear.
What is certain is that we are seeing a resurgence of interest in telemedicine and other digital health platforms. In addition, the spotlight has been shone on African healthcare systems, their lack of capacity, and longstanding lack of investment. Many people and organisations who did not take healthcare and its provision seriously before COVID-19 will now do so, driving consumption, and governments are likely – when able – to increase budgets for healthcare.
African e-health has received a timely boost from the COVID-19 crisis, where other sectors have suffered. But is it just a temporary boom, or a signal that an era of sustained growth is about to begin? Time will tell. The future remains uncertain.
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The High Tech Health: Exploring the African E-health Startup Ecosystem Report 2020 is available for purchase here. You can listen to the latest episode of Disrupt Podcast here.
