Investment in women-led healthtech firms in Africa soars in 2023, says Salient Advisory report

According to a report by Salient Advisory, funding for women-led healthtech firms in Africa surged notably in 2023. Companies such as Kasha based in Rwanda, Maisha Meds from Kenya, as well as Dawi Clinics and Chefaa from Egypt collectively amassed $52 million through 33 deals. This led to a huge 2,000% increase in financing for women-led firms within Africa’s healthtech industry.

Maisha Meds’ CEO, Jessica Vernon, indicated that the company’s unique business model geared towards solving problems is what attracted investors. Vernon elaborated that the company’s focus revolves around making private drug shops, pharmacies and clinics more digital, efficient, and reachable with technology.

In contrast, the financing women-led healthcare companies in 2023 secured derived from only 26 deals amounted to $2 million, a mere 1.4% of all healthtech funding. Salient Advisory’s report further pointed out that a Series B funding amounting to $21 million sourced by Kasha was the biggest investment to date in an African women-led healthtech firm.

Notably, investment in mixed-gender founding teams shot up to 21% in 2023 from 10% the year before. Despite a 2% decrease in aggregate healthtech funding ($167 million) compared to the previous year, 2023 proved more fruitful than the overall African tech ecosystem, which experienced a 39% decline in funding. The year also proved positive for gender financing, with women-led startups raising slightly over $200 million, a 7% year-on-year growth.

Investors across women-led firms, such as Maisha Meds, are largely global development entities like USAID and the Bill & Melinda Gates Foundation, with their funding primarily in the form of grants. For example, Maisha Meds secured $5.25 million in a stage 3 funding from USAID Development Innovation Ventures (DIV). This stage of funding is typically directed at innovators who have demonstrated scalable, innovative solutions to pressing challenges.

These and other funders like Chemonics, MSD, Cencora, and Microsoft have facilitated the establishment of women-led health tech companies, with more than half (52%) of the 145 deals for African healthtech innovators in 2023 comprising grants. However, equity funding accounted for 91% of the total funding raised, with an average ticket size of $3.2 million.

Experts identify several barriers that female founders or CEOs face in accessing private equity or venture capital funding. Ibijoke Faborode, founder of Africa Female Founders Collective (AFFC), states these issues could arise from women prioritizing family over their business, resulting in reduced exposure to investors.

To address these concerns, AFFC is planning a program in 2024 to help women founders or CEOs devote more time to their startups and connect with interested investors. The aim is to let these startups focus on developing innovations attractive to investors and solving societal issues.