African healthcare needs a lifeline 🩺

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Hey 👋🏽 Caleb and Sheriff here.

Today we’re talking about health tech.

There’s a wide gap in access to healthcare in Africa.

While the rest of the world is moving on, Africa seems to be falling behind.

Some health tech startups are trying to solve the problem. But is it enough?

Let’s get into it!

20 years ago, 15-year-old Adebayo Alonge had a near-death experience.

He had an asthma attack and needed a drug to calm his lungs.

His dad rushed to the local pharmacy to get the pills.

But instead, he was sold a fake drug that put Adebayo in a coma for three weeks.

Thankfully, he survived but the experience changed his life.

Adebayo went on to study pharmacy in college and invented a machine that detects fake drugs using light.

Then he started RxAll, a company fighting fake medicines using tech.

But this story is not just about Adebayo.

It’s about the system that nearly cost him his life.

A sick system treating sick people

Africa has over 1.4 billion people and nearly half can’t access quality healthcare.

It’s either too expensive, far away, or doesn’t exist.

For these people, healthcare looks very different.

It’s a small clinic with overworked nurses, a local pharmacy, or a traditional healer.

And this has created a host of problems:

• Africa carries 23% of the world’s disease burden

• Around 42% of drugs sold in Africa are fake - killing 50,000 people every year

• And there are only two doctors for every 10,000 people.

And if you think things are bad now - it’s set to get twice as bad as Africa’s population doubles over the next 25 years.

While countries like the US are beating diseases and focusing on longevity, African lives will stay short.

That’s why African healthcare needs a lifeline …

Because these problems run deep

The US will spend 19% of its budget ($1.14 trillion) on healthcare this year.

In Africa, the best figure you’ll find is 9% from South Africa.

And when health systems get little funding, the cracks show.

In late 2020, the COVID-19 pandemic infected four million people in South Africa.

Hospitals got overwhelmed and the health system couldn’t keep up.

In the end, over 100,000 people died - including more than 1,300 health workers.

But here’s the thing → South Africa has some of the best healthcare numbers in Africa.

The rest of the continent tracks even worse:

• Africa loses $2 billion annually when doctors leave for better-paying jobs abroad.

• Many patients have to pay for medical supplies themselves - which causes 15 million Africans to fall into poverty annually.

• Healthcare facilities are poorly managed and lack resources. For instance, some patients have to share hospital beds.

African governments and foreign aid providers have been trying to tackle these issues for decades.

In 2001, all African countries agreed to spend 15% of their yearly budget on healthcare.

But 23 years later, the budget figures have mostly stayed the same.

With chronic inflation and weakening currencies, the situation has worsened.

Now, there’s a $66 billion gap in annual healthcare funding.

This lack of investment means poor public health, which leads to lower economic activity.

In contrast, the US spends a quarter of its budget on healthcare.

And it reaps productivity rewards — every $1 invested in healthcare returns $3.9 in economic growth.

For a long time, no one filled the gap in services, equipment, and capital in Africa.

But over the last decade, a wave of tech startups has stepped in to change that.

Since 2016, $4.2 billion has gone into African healthcare, but only 10% went to health tech startups.

And on such little funding, these companies got to work:

• Helium Health helps hospitals in Africa go digital and is active in 19+ countries including the Middle East

• Zuri Health is putting a doctor in every African’s pocket via a chatbot.

• RxAll is using a machine it invented to fix the $200 billion fake drugs problem.

And there are many more.

One of them is MDaaS - a startup taking a stab at Africa’s diagnostics problem.

Four founders, one idea

In 2016, Olusoga Oni and three MIT classmates had an idea.

Their class assignment was to create a product that could serve a billion people.

Olusoga thought back to his experiences in Nigeria.

His dad, a doctor, struggled to get medical equipment for his hospital in Lagos.

The equipment was expensive, hard to source, and even harder to ship.

He realised this problem wasn't just his dad's — it was widespread across Africa:

• Hospitals and labs lacked basic medical equipment

• Point-of-care diagnostics were too costly for many poor patients

• Which forced many Africans to self-medicate.

That's when it clicked: what if they could ship refurbished medical equipment from the US to Africa?

This would make medical devices more affordable and accessible.

So, they launched MDaaS - short for Medical Devices as a Service.

But they soon hit a snag - many labs still couldn’t afford their devices.

A small Nigerian clinic only sees 10 to 20 patients daily, and only a few need X-rays.

Buying an X-ray machine made no sense, so they shifted to letting clinics rent these devices instead.

But then, they noticed something even deeper. Africa didn’t have enough diagnostic centres.

This could cripple their growth and keep them small.

So, they started setting up diagnostic labs and served patients directly.

Seven years and $6.8 million later, MDaaS has scored big points:

• It now has 17 diagnostic centres across 10 Nigerian cities

• It has served over 275,000 patients to date

• It supports over 1,300 hospitals, companies, and HMOs.

And MDaaS has its sights set on other African markets.

But is it possible to fix healthcare as a startup?

In African fintech, you can build an app today, go live tomorrow, and hit a million users in a year if everything goes right.

The infrastructure — APIs, payment switches, and banks — is already in place.

But in healthcare, startups are playing in hard mode.

Just look at MDaaS - they started with a marketplace, then switched to rental services, and finally built diagnostic centres.

Each pivot brought them closer to the core issue: infrastructure.

Good healthcare needs equipment, buildings, and feet on the ground.

But this takes time and money, tying them down to business models where costs grow with scale.

So, do startups have what it takes to tackle African healthcare's challenges?

When Amazon started, it relied on the US postal system and internet payments.

Africa's healthcare market has huge potential, but the gaps need more than just VC-backed startups.

Who’s going to step up and throw African healthcare a lifeline?

Hit reply and let us know your thoughts.

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