Female-led African health startups press on despite funding lags
In 2017, when Abimbola Adebakin launched her startup MyMedicinesLab, her goal was to enable anyone nationwide to order drugs from their smartphone and have them delivered within hours.
“If people could order vulnerable items such as their meals and have them delivered, without minding the risk of it getting opened up or tampered with during transit, why can’t the same be done for medications?,” she told Al Jazeera.
Five years on, Adebakin who began business by bootstrapping personal funds, has found it tough to secure funding for her idea. Despite significant traction within the domestic tech scene and proof of product market fit, it took a global pandemic for some of her potential investors to realise she was right on track, she said.
Thousands of kilometres away in Kenya, Daisy Isiaho, co-founder of Zuri Health is attempting to similarly improve access to healthcare.
As of 2016, Kenya had only 14 doctors and 42 nurses per 100,000 population, far below the World Health Organisation (WHO)’s recommendation of at least, 22 doctors and 228 nurses per 100,000 population respectively.
This staggering doctor-to-patient gap, coupled with low disposable income has limited access to basic health care, says Isiaho. “Zuri Health allows users to access affordable health services on the go,” she told Al Jazeera.
But like in Adebakin’s case, potential investors’ doubts about product-market fit and sustainability only began to erode as COVID-19 played out.
The staggering disparity
Africa’s tech ecosystem attracted $4.9 billion in total estimated funding in 2021, according to data from Briter Bridges, a London-based research and data analytics company focused on underserved markets.
Almost two-thirds of that funding went to fintech startups while health & biotech accounted for a mere 8 percent.
In June, Salient Advisory, a global health consulting firm specialising in African health technology ecosystems, released a report with more context.
“Overall investment in African health-tech ecosystems reached $392 million in 2021, an 81 percent increase over 2020,” it read. “But despite this increase, funding for health-tech innovators is less than 10 percent of the overall funding in the African tech ecosystem.”
The report which focuses on health supply chain startups in select countries, revealed that further funding disparity exists among African healthtech startups, as investment is disproportionately skewed toward men in that sub-sector.
“79 percent of funding of all types went to startups led solely by men…Sole women founders raised only 9 percent of funding in the last 12 months” the report added. “At the intersection of race and gender, Black women founders raised only 2 percent ($1.6m) of funding in the last 12 months and 9 percent ($21.6m) of all-time funding.”
Those in the industry say this inequity is a long-standing global concern and hinges on several factors. One factor highlighted in the report indicates that methods used to identify investment opportunities cater more to men.
“Culturally, networking events such as evening cocktails are not ideal for women entrepreneurs who may need to balance work and family-related responsibilities,” Zuri’s Isiaho told Al Jazeera. “Since investors often identify new investees through recommendations from portfolio companies dominated by men, companies led by men are more likely to be recommended.”
Also, experts identify gender bias, rather than a dearth of female-led businesses, as another stumblingblock.
“If you look at the data available, you’d find that female founders are raising less from a general value perspective,” Victoria Fabunmi, Investment Manager at Lagos-based Growth Capital Fund told Al Jazeera. “Even from a valuation stand, it doesn’t come close to what the male founders are attracting.”
I won’t say because the quality of female founders available is poor, I just think that there are many cultural or environmental factors people take into view when looking at woman or female-led business,” she said.
Furthermore, the health tech sector is relatively new compared to the more glamorous fintech, Malyse Uwase, Senior Consultant East Africa at Salient Advisory and one of the report’s authors, told Al Jazeera.
“The fintech space is the first that did well on the continent,” she said. “We had unicorn companies, hence it’s raised higher [amounts] for the time being.”
Maya Horgan Famodu, founder of Lagos-based VC firm Ingressive Capital said health-tech startups generally find it hard to crack the tech industry. “Speaking purely from my experience, I see that healthtech companies in general struggle to raise as problems are typically more complex across value chains and require expensive investment in infrastructure, where the government has fallen short.”
“The complexity and infrastructure necessary to build before seamless execution is possible makes it harder to explain, harder to convince investors, harder to raise,” she added.
In spite of these, female innovators say they are circumventing hurdles one day at a time and exploring options to disrupt rigid systems and dispel wrongly-held gender-based notions.
“Healthtech alone has not achieved the kind of scale that I think investors are looking for,” Adebakin said. “We need huge uptake, hundreds of thousands to millions of users to achieve profitability. But we don’t have that yet in healthtech; not in telemedicine nor online pharmacies. When volumes are more attractive, then investors are interested.”
Some industry stakeholders believe in order to bridge the funding gap, women-led businesses must be given the deliberate chance to catch up, with access to female-focused accelerator programmes, health-specific initiatives, training and mentorship.
“I’ve seen a fair number of decks this year from women building products for women and mothers. Unfortunately or fortunately, people invest in people they look like,” Famodu buttresses, “when the investment professionals properly represent women and mothers, we’ll see equitable investment in these spaces. ”
Female health-tech innovators, Uwase said, are vital value drivers in the healthtech ecosystem and shouldn’t be given less preference in funding because “ideally, for a lot of these innovations such as telemedicine and digital counselling, the target is women due to their cultural responsibilities of taking care of their families or aged parents.
Conversations around more funding for businesses owned by women and other minority groups have been regular features at tech fora for years, but now female founders say they want to see more action beyond talk.
“An inclusive process is what is typically preached but when we dig deeper it’s still 90% male founder-dominated,” said Adeola Alli, founder of OneHealth Nigeria, an online pharmacy and healthcare platform. “Society needs to be intentional in bringing women to the table…we need more women-specific funding first: for true equity, or at least funds heavily weighted in favour of women.”
Source: Al Jazeera