Africa’s Fintech revolution offers insight into the possibilities of health technology
Bongani Sithole, CEO, Founders Factory Africa
COVID-19 had a profound impact on the globe, bringing about changes both seismic and small in how we live our lives. The pandemic has also led to a significant increase in healthcare and biotechnology investment worldwide. Biotech continues to win, and Bio Space predicted in April 2022 that the world biotech market would be worth around $3.44 trillion by 2030, up from $852.8 billion in 2020. This prediction suggests a compound annual growth rate of 17.8% between 2021 and 2030. , the African healthcare sector is expected to be worth $259 billion by 2030.
Of note is the number of healthcare deals increasing gradually between 2020 and 2022. Specifically, deals in the pharmaceutical, biotech and life sciences verticals have shown a modest acceleration since 2020 – rising from one such deal in 2020 H1 to a dozen in 2022 H1. With this in mind, it is valuable to consider what levers were driving fintechs on the continent, whether these levers apply to the health technology sector, and how they may affect the opportunities available to the continent’s health technology entrepreneurs.
Fintech’s strategy for success – Infrastructure and services
In fintech, innovation has been driven by finding connections and challenges that can be solved within tight infrastructure constraints. As a result, African fintechs have been able to increase financial inclusion by providing services that bring previously untapped users into the financial system. Whether through payment gateways, innovative loans or digitally enabled points of sale, they have created products and services that meet customers’ wishes and needs in ways that traditional financial players could not.
Fintech’s success has been a net positive for the African tech ecosystem and its end users. While fintech has been able to innovate within tight technological environments, the telecommunications infrastructure that existed at the time (and has matured further) is a key boost to the vertical’s success. Flutterwave is an example of a company that has enabled other companies to act on top of this infrastructure, with customers only a mobile device away from being able to participate, creating viable ways for capital to move within the ecosystem.
The other lever for fintech’s success is services. These are companies that have built solutions on top of existing infrastructure, with the mobile money revolution being an example of this service lever. Without it, companies like M-Pesa and Mukuru would not have succeeded as the capital velocity that has supported these ventures would not have been possible.
Does health technology have the same levers to pull as fintech?
When working with any kind of technology, there are limitations and possibilities. When comparing health tech and fintech, for example, it’s clear that infrastructure plays an important role in the healthcare sector, as do services, but the deeper you look, the more nuanced health tech can be due to the nature of the problems it aims to solve compared to . to fintech. Often fintech plays an important role in a health technology solution, but ultimately you are addressing a health limitation in a given market.
So what about the infrastructure? Compared to fintech, healthcare technology and the healthcare sector more generally require deeper infrastructure investments since healthcare at its core is actualized in the user’s physical experience. Healthcare infrastructure, broadly defined, includes not only clinics and hospitals, but the beds in which patients sleep, chairs, medical equipment, ambulances and even tools for medical professionals to do their jobs.
Skilled employees are also important, and these skills take years to cultivate. I haven’t even mentioned pharmaceuticals, which can take years to successfully develop and receive regulatory approval. These can all be limitations. While fintech is very digital – healthcare technology is more deeply connected to the physical world.
Turning to services, three thoughts emerge about how health technology can affect the continent’s various markets for the better:
- Provides access to cheaper health services
- Access to health services in your pocket, such as telehealth (which COVID-19 significantly advanced)
- How technology can play a role in bridging the skills gap and helping doctors do more with fewer resources
Based on our own experiences at Founders Factory Africa, we know that these are problems that health technology can solve, with its ability to improve users’ lives.
Only in our portfolio, Viebeg enables hospitals to order medical equipment without paying for it in advance. Neopenda has developed a product – neoGuard – which is a clinical vital signs monitor for infants and other patients in areas with limited resources. VitruvianMD seeks to solve the skills gap that exists in many African countries by building low-cost camera technology that instantly digitizes any analog microscope. When combined with AI, it enables the delivery of predictive diagnostics in various pathological fields anywhere, even in the most remote locations.
Healthtech can be just as successful as fintech, especially when innovation is used in ways that solve pain points for health users on a daily basis. Still, we must be careful about juxtaposing health technology’s success as inevitable. For that to happen, we need to have a clear understanding of the limitations health technology faces. While it may share similar levers as fintech, these levers need to be fine-tuned in ways that recognize the unique challenges facing the broad African healthcare sector.
