🍔 Quick Bite: Africa’s healthtech dream keeps running into old problems: weak policy, poor funding, and shaky infrastructure. Without government muscle, even the best startups are struggling to stay alive.
🧠 The Breakdown
In October 2024, government officials from across Africa convened in Kigali for a healthtech policy summit. Ministers pledged collaboration, startups presented bold solutions, and multilateral organisations offered support. By the end, participants charted an “implementation roadmap with defined goals for the next year and beyond.” Some months earlier, MedSaf, a Nigerian healthtech backed by Y Combinator and over $7 million in funding, shut down, citing “mounting debts and significant unpaid receivables from hospitals.”
That contrast captures the central tension of African healthtech: bold ambition on one hand, fragility on the other. It raises the question: can healthtech flourish on venture capital alone, or does it demand deeper government backing?
Why Healthtech struggles to scale
Healthcare in Africa is fragmented by trust, affordability and regulation. Patients often prefer in-person clinics or even informal healers; subscription or digital payment-based revenue models rarely materialise at scale. Unlike fintech, with its rapid transactions and network effects, healthtech depends heavily on partnerships with hospitals, pharmacies or government institutions; a slower, more complex process.
Then there is the issue of medicine quality. Studies show that nearly 22.6 % of medicine samples in Africa are substandard or falsified after failing quality tests across multiple surveys over time. That breakdown erodes trust in pharmaceutical supply chains, making it harder for startups to justify digital pharmacy or logistics models.
Compounding the problem is inconsistent funding. In 2024, healthtech investment in Africa saw a decline; many startups failed to secure follow-on funding, often surviving on grants, impact capital or one-off deals. Without reliable cash trajectories, even promising ventures struggle to survive the interim years.
Infrastructure also casts a long shadow. In many regions, reliable electricity and internet remain luxuries, especially in rural areas. Healthtech founders are often forced to become logistics operators. That means healthtech startups have to function like a delivery and regulatory business all at once.
The role of government
African governments control much of the health system, from procurement to regulation and standards. In Nigeria, the National Health Insurance Authority (NHIA) Act of 2022 promises to expand universal health coverage. Regulatory bodies like NAFDAC oversee drug quality. But coordination is weak, and implementation is uneven. Digital health solutions often struggle to align with national policy and startup execution.
Strategic government involvement can help untangle this web. Rwanda launched digitised insurance and patient data systems, creating a foundation that startups could adopt. Kenya used public-private collaboration during COVID-19 to build surveillance and logistics tools. In such arrangements, governments set standards, absorb early risk, and open up institutional demand.
The paradox? Healthtech companies typically must sell to sectors that don’t yet budget for digital services, and investors expect venture returns. While fintech draws massive private capital, healthtech relies too heavily on institutional and blended funding. The most promising deals combine grants, donor support, government contracts and equity.
Consider this: Africa’s governments, on average, now spend only about 7.4% of their total budgets on health, less than half the 15% pledged in the Abuja Declaration two decades ago (and only South Africa and Cabo Verde reliably meet that target). At the same time, official development assistance for Africa’s health sector has dropped by 70% between 2021 and 2025, compounding resource scarcity for healthtech deployment across the continent.
This mismatch—entrepreneurs striving for innovation in underfunded systems, global capital chasing quick returns, and governments promising much but funding little—creates an environment where only a few startups survive.
Can Healthtech attract enough venture capital?
In its current form, pure venture backing is rarely enough. Many healthtech models require significant capital ahead of revenue. But that does not mean venture investment cannot work: it must adapt.
The path forward lies in hybrid models. Equity investors collaborating with governments and donors can share risk while targeting sustainable business lines. Startups can anchor early revenue using government contracts or institutional clients, then scale into private markets. They must align with national health priorities (e.g. maternal care, supply chain, diagnostics) and build modular systems that plug into government infrastructure.
Ultimately, tech in health should aim not to replace systems but to make them function better: digitising patient data flows, enabling transparent procurement, and reducing waste. When that alignment is in place, tech becomes a partner. Until governments fulfil policy with financing, only the most resilient and adaptive healthtech firms will cross the chasm between promise and scale.
