OBG: Africa’s health tech market on course to reach $11bn by 2025

27 / 10 / 2022

By Marwa Nassar - -

The Oxford Business Group (OBG) said Africa’s health tech market on course to reach $11bn by 2025.

Digital health companies raised a record $15bn in global venture capital funding in the first half of 2021, up 138% year-on-year, with 30% of the total directed towards telehealth.

An estimated $140bn in private sector finance will be needed annually between 2015 and 2030 to realize the United Nations’ health-related Sustainable Development Goals, according to the UN Conference on Trade and Development, underscoring the importance of boosting spending commitments in the global health tech space.

As the health tech market in developed countries matures, emerging markets offer avenues for digital health technology to expand access to care and improve patient outcomes, while also bringing down health care costs.

In sub-Saharan Africa, for example, some countries have as few as 0.23 doctors per 10,000 people, according to the World Health Organization.

Investment in low-cost, high-impact fields such as telehealth could help to bridge this gap, however, with Africa’s health tech market on course to reach $11bn by 2025.

Ghana has hosted several health tech initiatives in both the public and private sphere. While the Ministry of Health and the Ghana Health Service set up teleconsultation services as early as 2016, in collaboration with the Swiss Novartis Foundation, the West African nation’s e-health transformation has more recently been accelerated by Covid-19.

In October 2021 a local health tech start-up, mPharma, announced plans to construct 100 virtual health centers in seven African markets – namely, Ethiopia, Ghana, Kenya, Malawi, Nigeria, Rwanda and Zimbabwe. Backed by Silicon Valley-based Breyer Capital, the start-up raised over $50m between its founding in 2013 and 2021.

In the last year mPharma’s partnership with Gabon’s strategic investment fund, geared towards building drug supply infrastructure, has saved the country an estimated 30% in procurement costs.

In February Nigerian health tech start-up Reliance Health raised $40m in its Series B funding round, the largest amount raised in a single round to date in Africa.

The company offers subscription-based health plans to its customers and manages telehealth services, a drug-delivery system and two clinics in Lagos. Like many health tech start-ups, it also serves as a link between patients and third-party care providers such as hospitals, diagnostics centers and pharmacies. Around 90% of Reliance Health’s revenue model focuses on the business-to-business segment, notably corporate health care plans for employees.