According to a report from healthcare consulting firm Salient Advisory, South Africa is leading the way in healthtech innovation in the southern Africa region. The report, titled “Innovations in Digitizing Health Supply Chains” in Africa, funded by the Bill and Melinda Gates Foundation, highlights that a significant 78% of all healthtech startups and innovators in the southern Africa region are based in South Africa.
The country’s dominance in healthtech innovation is reinforced by its ability to attract the highest amount of venture capital (VC) funding in the region. With capital being scarce in the healthtech industry, innovators are naturally gravitating towards the country with the most investment opportunities.
Key findings from the report shed light on the state of healthtech innovation in the region:
- 33% of the companies in the region were founded in the last two years.
- 12% of the companies were solely founded by women.
- 10% of the companies have a mixed-gender founding team.
- Innovators in the region have raised a total of $7.3 million in external funding.
- 12% of companies operate in more than one country, extending beyond Southern Africa.
- 7% of innovators have established government partnerships in South Africa, Zimbabwe, and Malawi.
The report also highlights the funding landscape for healthtech innovators across the continent. Plug N Play Ventures and Launch Africa are leading the way in providing equity and debt financing for healthtech startups. Meanwhile, the Bill & Melinda Gates Foundation and Google’s Black Founders Fund have contributed the highest number of grants. Interestingly, 83% of total reported funding has been raised by innovators headquartered outside the continent, with e-commerce giants and medical drone delivery operators attracting the majority of external investment.
Despite the promising developments in healthtech, there are gender financing gaps that persist. While companies founded solely by women represent 8% of all startups, they have received only 2% of all reported funds to date. The lack of access to equity financing has led women-led companies to rely more heavily on debt and grants.
Hany Abdallah, senior program officer for supply chain systems at the Bill and Melinda Gates Foundation, expressed delight in witnessing the progress made by African health innovators in utilizing technology to optimize supply chain solutions and enhance access to medicines. He also noted the increase in government partnerships, which are expected to drive positive health outcomes in the region.
The report showcases South Africa as a frontrunner in healthtech innovation in the southern Africa region, while also highlighting areas of opportunity and the need for further support to bridge gender financing gaps and enable more inclusive growth in the healthtech sector across the continent.
