2023 Next HealthTech Africa Funding Recap
2023 was a challenging year for startups globally, with a decline in the number of deals and the total amount of funding raised. For African startups, this trend generally remained the same for most tech sectors, but how exactly did the African health tech ecosystem perform?
According to the Briter Bridges Africa 2023 Investment Report, the health sector received the third largest amount of funding, following fintech and cleantech. Our Next Health Tech Africa Funding Tracker suggests that $171M in investment went into African health tech in 2023. This investment accounts for 97 total financing events, including publicly disclosed grant funds. Compared to 2022 data tracked by Africa: The Big Deal, this year’s funding for African health tech startups represents a 28% increase compared to last year’s total. However, overall deal count decreased by 12%, with a total of 62 deals* in the health tech sector.
In addition to the increase in total funding, these startups also experienced an increase in the amount of funding provided to startups with at least one female founder. In 2023, of the 85 unique startups that received funding, 42% of those funded have at least one female founder. However, there still remains a significant challenge in addressing the gender imbalance in funding, as startups founded solely by women continue to receive only a fraction of the total funding
Despite the economic condition of the startup market, the strong players of the African health tech ecosystem remained resilient against the difficult climate. To recap the year, here are some of the 2023 trends that we saw:
Increased M&A Activity: With a more challenging funding environment, consolidation is frequently seen as M&A gives companies, especially cash-strapped ones, the opportunity to expand their offerings despite limited resources. While the M&A pace did not accelerate as quickly as predicted for 2023, there were several notable transitions throughout the year. The M&A activity kicked off early in the year with Evercare Hospital’s acquisition of Nigerian startup Doctoora (March 2023). Additional activity included Egypt-based Grinta’s acquisition of Auto-Cure (August 2023), Turaco’s entry into Ghana with the acquisition of MicroEnsure (September 2023), and Penda Health’s acquisition of Grace Health (November 2023).
Leading Verticals: Companies focused on e-pharmacy/medical supply chain solutions continued to be amongst the top funded startups. Many big raises of the year such as Yodawy’s $16M Series B (Feb 2023), MyDawa’s $20M round (July 2023), and Remedial Health’s $12M Series A (July 2023) spotlight the continued advancement of this vertical. The Gates Foundation backed i3 program also supported 29 healthcare supply chain startups with $50,000 grants with its 2nd cohort, highlighting the sustained interest of these types of product offerings. Health financing solutions also garnered some interest in 2023 citing the success of the startups like Helium Health with its $30M Series B (June 2023), Rwanda-based Eden Care also joined last year’s YCombinator cohort, and Susu’s $4.9M raise (December 2023) towards the end of the year.
The Big Four: The ‘Big Four’ (Nigeria, Egypt, South Africa, and Kenya) attracted most of the health tech startup funding in Africa, accounting for ~70% of total financing. While these countries represented a large amount of the funding, plenty of activity occurred outside of them. The first ever investment in Somaliland was received by health tech startup, Caafisom (May 23). In addition, Africa Healthcare Network(AHN), with offices in Tanzania, Rwanda, and Mauritius, also raised a $20M Series B (November 2023) to expand and enhance its services. Finally, Francophone Africa pushed forward their solutions with the advancements/funding of companies like Waspito (Cameroon) and Susu (Cote d’Ivoire).
Amidst the financial challenges of 2023, startups worldwide faced difficulties. However, the continued global enthusiasm for African health tech has been instrumental in supporting this sector, enabling it to sustain its momentum during these challenging times. Looking ahead, 2024 will be a year of continued growth, but also a year of adaptation. As startups look to maintain their cash flow and respond to market dynamics, we expect new partnerships, focus shifts, and creative approaches to nurture the evolving African health tech ecosystem.
*Deals in this case relates to equity/debt funding events i.e., accelerator funding, venture funding