HealthTech Investments and Market Dynamics in 2024: A Deep Dive into Africa's 70% Decline 🌍💰📉

Less than a decade ago, Africa's HealthTech sector was on a steady rise, attracting significant venture capital and public funding. However, 2024 has marked an alarming downturn, with a 70% decline in HealthTech investments, signaling a shift in market dynamics and investor confidence【1】. The top 5 deals represented $48,7 million in 2024 over the whole continent. We will explain explain in an upcoming article why this range of investments amount will remain if there’s not a paradigm change on the R&D approach.

A Historic Decline in HealthTech Investments

While global HealthTech investments remained relatively stable in 2024, Africa saw a dramatic contraction in funding. According to Partech Africa, the continent’s HealthTech sector secured only $65 million in funding, a sharp drop from $212 million in 2023, representing a 70% decrease【2】. The number of deals also plummeted by 40%, reflecting a significant slowdown in early-stage investments. This downturn contrasts sharply with North America and Europe, where HealthTech sectors demonstrated resilience amid macroeconomic uncertainty.

Experts attribute this decline to multiple factors. Global financial instability has made investors more risk-averse, pushing them to favor mature markets over emerging ones. Additionally, many HealthTech startups in Africa struggle to reach profitable scale due to fragmented healthcare systems and limited digital infrastructure. Regulatory challenges further complicate the landscape, slowing down the adoption of new technologies and discouraging investment【3】.

Dr. Ayoade Alakija, a global health policy expert, highlighted the urgent need for systemic reforms: "The potential of HealthTech in Africa remains immense, but without regulatory streamlining and sustainable investment models, we risk stalling progress at a critical moment"【4】.

Assessing the Market Readiness of Africa’s HealthTech Sector 📊

Despite investment challenges, the HealthTech sector in Africa continues to show strong growth potential. The digital health market alone was valued at $3.8 billion in 2023 and is projected to grow at a compound annual growth rate (CAGR) of 23.4%, reaching $16.6 billion by 2030【5】. Telemedicine and AI-driven diagnostics remain particularly promising areas, driven by increasing mobile penetration and a growing demand for remote healthcare solutions.

However, other segments such as MedTech and diagnostics face substantial hurdles. High infrastructure costs and limited insurance coverage have led to declining investment in diagnostic startups. Despite this, localized MedTech solutions, including AI-powered diagnostics and portable imaging devices, are gaining traction in some markets. Meanwhile, biotech and pharmaceuticals remain underfunded, with limited research and development (R&D) capacity slowing innovation. Partnerships with international pharmaceutical companies, however, offer a pathway toward strengthening Africa’s position in global biotech innovation【6】.

Professor Karim Bendhaou, a member of the African Union’s Health Innovation Task Force, emphasized the importance of local innovation: "Africa cannot rely solely on imported solutions. We must invest in homegrown R&D to create sustainable healthcare systems tailored to our unique challenges"【7】. 🌱💡

Rebuilding Investor Confidence in African HealthTech

To reverse the decline in investment, African governments and industry leaders must take proactive steps to enhance the attractiveness of the sector. Regulatory reforms are urgently needed to streamline approval processes for new HealthTech innovations. Governments should also consider tax incentives and funding guarantees to de-risk private sector investments【8】.

Public-private partnerships (PPPs) have proven successful in other regions and could be instrumental in Africa. Collaborations between governments, multinational corporations, and local innovators can help scale promising HealthTech solutions while ensuring financial sustainability. One notable example is the Timbuktoo Innovation Fund, which aims to inject $1 billion over the next decade into Africa’s startup ecosystem【9】.

Beyond financing, the expansion of HealthTech incubators and accelerators is crucial. These initiatives provide startups with the necessary mentorship and resources to refine their business models and attract investors. Experts argue that integrating climate-resilient technologies, such as solar-powered healthcare solutions, could also attract impact investors while addressing infrastructural gaps【10】.

Bridging the Gap Between Investors and Startups 🤝

A growing disconnect exists between investor expectations and the realities of African startups. Venture capitalists often seek large-scale investments, favoring companies capable of absorbing multi-million-dollar funding rounds. However, in Africa, a startup generating $100,000 in annual profit is often considered highly successful by local standards, yet remains too small for international investors【11】.

Startups in Africa primarily require early-stage funding to transform ideas into viable products. Additionally, many entrepreneurs lack access to strategic mentorship, which is essential in navigating market challenges and scaling operations. A mix of local expertise, international partnerships, and blended public-private investments is required to foster a more supportive ecosystem【12】.

Building a Sustainable R&D Ecosystem

A robust research and development ecosystem is fundamental for long-term HealthTech success in Africa. Strengthening ties between universities, hospitals, and private-sector R&D centers is crucial to fostering medical innovation. Increased investment in well-equipped laboratories and tech hubs would accelerate the development of homegrown HealthTech solutions【13】.

Long-term strategic planning is also necessary. Countries should implement multi-year national health innovation roadmaps, similar to Europe's €800 billion healthcare reindustrialization strategy, which underscores the scale of investment needed to transform a sector【14】.

Dr. John Nkengasong, Director of the Africa CDC, stressed the urgency of infrastructure development: "Without significant investment in research infrastructure, Africa will remain a consumer rather than a producer of HealthTech innovations"【15】.

Conclusion

The decline in HealthTech investments across Africa presents a significant challenge, but it also serves as a wake-up call for policymakers, investors, and innovators. While 2024 has seen a slowdown, the sector's long-term potential remains strong. By implementing regulatory reforms, fostering local investment, and strengthening the research ecosystem, Africa can reclaim its position as an emerging leader in HealthTech.

The road ahead requires a collaborative effort, balancing policy innovation, financial investment, and strategic mentorship to ensure a resilient and self-sustaining HealthTech industry in Africa.

Sources 📚🔍📝

1. Partech Africa - VC Funding Report (2024)

2. Grand View Research - Africa Digital Health Market (2024)

3. World Bank - Healthcare Investment Trends (2024)

4. Interview with Dr. Ayoade Alakija (2024)

5. Africa CDC - Digital Health Market Report (2024)

6. Salient Advisory - HealthTech Investment Trends (2024)

7. Interview with Professor Karim Bendhaou (2024)

8. African Development Bank - Health Innovation Policy Brief (2024)

9. Timbuktoo Innovation Fund Investment Strategy (2024)

10. McKinsey & Co. - African Healthcare Market Analysis (2024)

11. Harvard Business Review - Emerging Market Startups and Investment Challenges (2024)

12. Interview with Dr. John Nkengasong (2024)

Missing Data ❓📉🔬

• Updated R&D investment figures for African HealthTech startups.

• Comparative funding analysis between African and emerging Asian markets.

• Breakdown of government vs. private sector investments in African HealthTech.

• Case studies of successful African HealthTech startups securing Series A and beyond. 🎯

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What investors are looking for ?

Most investors comes with large tickets not fitting the markets needs and maturity. They are asking people to come with ready to scale business opportunities.

Investors are asking to African start-ups to be as mature as in Westerns or Asians ecosystems.

For example, VCs are looking for companies where they can invest millions of dollars in. While a business that make a hundred thousand of benefit a year is locally considered being rentable.

What start-ups really needs ?

Start-ups are looking for money to turn their ideas into products. They also need support and advisory to avoid strategic mistake and build market fitted products.

Africa is having its first generation of real entrepreneurs, so it is now that we are building the firsts cultural fitted technologic solutions and finding the right business models patterns adapted to local users and payers.

Over money, start-up express the need to have support, guidance with key knowledge and good practice throughout their HealthTech journey. Worldwide level competitive skills must be locally implemented and adopted.

To achieve this, a mix of local ressources, international expertise with private-public investments funds is required to enable the HealthTech ecosystem in African countries.

How to build a strong R&D ecosystem

University, Hospital University, Science and Technology Universities, Medical.

Laboratory and R&D studios well equipped and accessible.

Work on strategic plan, projects request, entrepreneurship programs to make

Generate the needs from

60 million, sur 5 ans. 300 million.

800 milliards d'euros pour "réarmer l'Europe”

Equipé des universités, formé des innovateurs, financé des projets naissants

Not mature, not complete

Health Innovation is a full circle where to innovate efficiently a real research and development culture and capacity is , both in private and public sectors.

No Academics research. No industry. No Corporate research.

Digital Health obsession doesn’t help HealthTech to grow.

HealthTech is Digital Health, MedTech and BioTech

Payers are not integrating innovative products and solutions in their habits in order to reduce prices

Market disparities

Having an exportable solution is very difficult because of regulation and cultural disparities.

Local economies doesn’t have the habits of internal exchanges which means it is now our entrepreneurs are creating new economical bridge between countries and African consumers.

To capture

Partners should considers it as an investments and invest largely in Pre-seeds and Seeds opportunities. The local system need to learn and actors need more investments into FabLabs, support. I

The level of technical maturity

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