AfricInvest, a leading investment platform with a focus on the African continent, has recently achieved a significant milestone by concluding the fundraising for its Transform Health Fund (THF) with a total of $111 million in capital commitments, thereby exceeding the initial fundraising target set for the fund. The THF, which is being managed collaboratively with the Health Finance Coalition (HFC), has been established with the objective of catalyzing the growth of innovative healthcare delivery models throughout Africa. The fund is particularly dedicated to bridging the substantial gaps in health financing and enhancing the capacity of the healthcare sector on the continent.
The successful closure of the fund has been made possible through the support of a diverse consortium of investors, which includes prominent international financial institutions such as the International Finance Corporation (IFC), Proparco, Swedfund, and the US International Development Finance Corporation (DFC). In addition to these institutions, several key players from the private sector have also played a pivotal role in backing the fund, including global healthcare and technology giants Merck & Co., Inc. and Philips, as well as investment entities like FSD Africa Investments and Grand Challenges Canada. The fund has also garnered support from philanthropic entities, including the Skoll Foundation and the UBS Optimus Foundation.
The wide-ranging support from such a varied group of investors underscores the mounting interest in the healthcare sector of Africa, with a particular focus on innovative financing arrangements that blend capital from public, private, and philanthropic sources. The THF is committed to endorsing businesses that have a track record of delivering effective healthcare solutions, with a special emphasis on those enterprises that cater to the needs of the most vulnerable segments of the population.
The fund’s strategy is centered on the expansion of healthcare solutions by providing a mix of debt and mezzanine financing options. Mezzanine financing is a form of business loan that is structured to align with a company’s cash flow, offering more flexible repayment terms. The THF is particularly interested in companies that are invested in strengthening local supply chains, incorporating digital technology into healthcare delivery, and ensuring that care is both affordable and accessible.
In a statement, Ziad Oueslati, the Founding Partner of AfricInvest, highlighted the critical role of innovative financing models like the THF in addressing the pressing health financing and capacity challenges in Africa. Martin Edlund, the CEO of Malaria No More, concurred with this viewpoint, stressing the increasing importance of private-sector investment in healthcare, especially in light of the stagnation in donor funding and the mounting debt burdens faced by African nations.
The THF has already allocated $20 million to a number of significant ventures, including the Africa Healthcare Network (AHN), Insta Products, and Lapaire Glasses in Kenya. These investments are indicative of the fund’s dedication to meeting immediate healthcare needs while also fostering long-term systemic enhancements. For instance, AHN stands as the largest provider of dialysis services across sub-Saharan Africa, and Insta Products is engaged in the production of therapeutic food products aimed at combating malnutrition among children and mothers.
With sub-Saharan Africa accounting for 20% of the global disease burden yet receiving a disproportionately low level of impact investment, the THF seeks to address this imbalance by concentrating on enterprises that are led by local entrepreneurs. This approach is in line with a broader shift in development finance, moving away from traditional donor-based funding towards sustainable and scalable private-sector-driven models.
Looking ahead, the THF plans to extend its investments to include more health-tech startups and innovative healthcare delivery models, thereby contributing to the enhancement of healthcare accessibility across the African continent. With its successful fundraising efforts and strategic investments, the THF is well-positioned to effectuate long-term improvements in health outcomes while simultaneously fostering the growth of Africa’s nascent health-tech sector.
