There’s no denying that the pandemic has fueled global growth in health technology over the last three years. The event has accelerated the use of telemedicine, virtual care, and drug delivery, piqued the interest of investors in the sector.
Large sums of money have also been invested in growth-stage startups in Africa. Reliance Health, a digital healthcare provider based in Lagos and Texas, is the latest beneficiary, and it is doing so in grand style, raising $40 million. The Series B round is the largest in African health tech history.
According to reports, the African health tech market will be worth more than US$11 billion by 2025, and Reliance Health intends to play a key role in the continent’s capitalization.
Femi Kuti, Opeyemi Olumekun, and Matthew Mayaki founded the company in 2016. It provides health insurance and telemedicine through partnerships with hospitals and healthcare facilities using an integrated process.
“Our mission is extremely simple. “I mean, the definition is simple, but the execution is sometimes more difficult,” CEO Kuti told TechCrunch on a conference call. “Essentially, we’re attempting to use technology to make quality health care accessible and affordable in emerging markets.”
Kuti’s remarks highlight two critical issues in Nigerian healthcare: accessibility and affordability. People in Nigeria and other emerging markets frequently take healthcare for granted.
In terms of pricing, hospitals have yet to find a way to charge patients not at the lowest possible fee, but at a price point that the general public can comfortably afford.
Reliance Health has combined both critical concepts so that users can subscribe to an integrated suite of healthcare products. Reliance Health directly provides some of that healthcare through its telemedicine platform, drug delivery system, and two clinics in Lagos, Nigeria. Others are provided by third-party provider partners, such as hospitals, diagnostic centers, and pharmaceutical companies.
Kangpe, a telemedicine-focused startup in Nigeria with the slogan “doctor in your pocket,” was founded in 2015 by the three co-founders. However, after a year of running the business and realizing how early the market was as well as the systemic follow-up gaps and processes that existed, they shifted to Reliance.
“For example, back then, if a patient talks with this doctor and he recommends an x-ray checkup or, later, surgery, what happens next?” He inquired. “We weren’t able to manage all of those [end-to-end] processes, which necessitated a soft pivot from the whole telemedicine focus thing to this integrated healthcare provider thing that we’re doing now.”
Reliance Health operates on both a business-to-business and a business-to-customer basis. Reliance HMO is the company’s health insurance plan for both groups of customers, with monthly, quarterly, or yearly health plans ranging from $3,500 ($7.00) to $297.00. Businesses, on the other hand, can make subscriptions on behalf of their employees, which Kuti claims are slightly cheaper than retail customers’ plans.
Reliance Health is used by over 200,000 people across both models. However, the platform’s business customers have proven to be the most loyal. According to Kuti, the platform serves 600 of them, including Biersdorf Nivea, Jumia, and PwC, while maintaining an attributable intention rate of 99 percent.
These customers can use an app to chat with a doctor, find healthcare providers near them to visit or get medications from, and manage the delivery of their medications. Reliance, for example, could suggest lifestyle changes if a customer was diagnosed with diabetes and make hospital referrals if a user spent hours on the phone at his last visit to the clinic, according to Kuti, based on frequent usage.
“Essentially, what we try to do is guide people to the best option in terms of care that we can receive,” he explained. “And, whether that option is provided by a third-party partner or by us, we are more concerned with how we work with the customer to guide them to the best option when it comes to accessing healthcare data.”
The six-year-old startup reported 3.5x year-over-year revenue growth in 2016. This continued growth will be fueled by a new round of funding led by General Atlantic. It is the firm’s first investment in Africa, joining a growing list of first-time investors who have led growth rounds in the last two years, including FTX, Avenir, SVB Capital, and Fidelity.
“General Atlantic is thrilled to announce our first technology investment in Africa in Reliance Health, backing a team focused on improving healthcare quality for millions of patients in Nigeria and around the world,” said Chris Caulkin, General Atlantic’s managing director and head of EMEA Technology, in a statement.
“Femi and Ope have consistently impressed us, exemplifying the entrepreneurialism and innovation that we see across the African continent.”
Partech, Picus Capital, Tencent Exploration, Africa Healthcare Master Fund, P1 Ventures, Laerdal Million Lives Fund, and M3 Inc. are among the other investors in the round.
This investment comes two years after the company’s $6 million Series A, which took place in January 2020. Reliance previously raised a $2 million seed round in 2017, months after graduating from YC. Partech, Y Combinator, Golden Palm Investments, Ventures Platform, LoftyInc Capital — as well as Tencent and Picus — participated in both rounds, totaling $48 million.
According to the CEO, Reliance Health intends to use a portion of the funding to construct two more clinic facilities in two Nigerian cities, Abuja and Port Harcourt. Reliance Health also plans to hire talent and launch new product lines, particularly for Nigerians living in the diaspora.
The healthtech firm will enter new markets. Egypt is at the top of that list, with Reliance Health already hiring a country manager in preparation for a mid-year launch. Kuti adds that the company plans to enter two or three new markets before the end of the year.
Following years of government and donor-supported funding initiatives, venture capital in African healthtech is increasing. According to reports on the African VC landscape, healthtech startups across the continent raised less than $100 million in 2020, but that figure increased to $370 million last year.
While the sector still accounts for less than 10% of total funding, large rounds from startups such as Vezeeta, Helium Health, 54gene, mPharma, Africa Health Holdings, and now Reliance Health over the last two years indicate that African healthtech is maturing, buoyed by market drivers such as the pandemic, population size, data analytics, and consumer-centricity.