There is no denying the growth of healthtech globally in the last three years, thanks to the pandemic. The event accelerated the use of telemedicine, virtual care and drug delivery, thus arousing the interest of investors in the sector.
Investment has also made its way to Africa, with large checks going to growth-stage startups. Digital health provider based in Lagos and Texas Trust Health is the last beneficiary and is doing it in a big way, raising $40 million. The Series B round is the largest of its kind in African health technology.
Reports say healthcare technology in Africa is expected to reach a market value of over $11 billion by 2025 and Reliance Health is looking to play a key role in the continent by achieving that capitalization.
The company was founded in 2016 by femi Kuti, Opeyemi Olumekun and Matthew Mayaki. It uses an integrated process to provide health insurance and telemedicine through partnerships with hospitals and healthcare facilities.
“Our mission is super simple. I mean, the definition is simple, but the execution is sometimes more difficult than that,” chief executive Kuti told Ploonge in a call. “So essentially what we’re trying to do is use technology to make quality healthcare affordable and affordable in emerging markets.”
Kuti’s comments highlight critical health issues in Nigeria: affordability and affordability. In Nigeria and some emerging markets, it is common for people to take healthcare for granted. No metrics are in place to ensure healthcare is optimized when used, so people tend to accept whatever healthcare is available.
In terms of pricing, hospitals haven’t found a way to charge patients not necessarily the cheapest rate possible, but using prices the general public can comfortably afford.
Reliance Health has brought the two vital concepts together so that users can access an integrated set of health products through subscriptions. Some of this healthcare is provided directly by Reliance Health – through its telemedicine platform, drug delivery system and two clinics based in Lagos, Nigeria. Others are through third-party supplier partners: hospitals, diagnostic centers and pharmaceutical centers.
In 2015, the three co-founders launched Kangpe, a telemedicine-focused startup in Nigeria with the slogan “doctor in your pocket”. But a year after running the business and realizing how early the market was and the gaps and systemic follow-up processes that existed, they turned to Reliance.
“Back then, for example, if a patient talked to this doctor and he recommended an x-ray or, after that, surgery, what happens next?” he asked. “We can’t manage all those [end-to-end] processes and that required a kind of smooth pivot of the entire telemedicine focus to this integrated healthcare provider that we are doing today.”
Reliance Health operates business-to-business and business-to-customers models. RelianceHMO is the company’s health insurance plan for both sets of customers, where individuals can select monthly, quarterly or annual health plans ranging from ₦3,500 (~$7.00) to ₦148,500 (~$297.00) . On the other hand, companies can take out subscriptions on behalf of their employees, which Kuti says are slightly cheaper than plans used by retail customers.
More than 200,000 individuals in total for both models use Reliance Health. But the platform has seen the most grip with its enterprise customers. The platform serves 600 of them, including Biersdorf Nivea, Jumia and PwC, while maintaining an attributable intent rate of 99%, said Femi.
With an app, these customers can talk to a doctor, find nearby healthcare professionals to visit or get medication, and manage the delivery of their medication. Based on frequent use, Femi said Reliance, for example, can suggest lifestyle changes if a client is diagnosed with diabetes and make referrals to hospitals if a user spends hours on the line on their last visit to the clinic.
“Essentially what we’re trying to do is guide people to the best option in terms of the care we can get,” he said. “And whether that option is provided by a third-party partner or us, we are most concerned with how we work with the customer to guide them to the best option when it comes to accessing their health data.”
The six-year-old startup said it averaged 3.5x revenue growth year-over-year compared to 2016. The new round of funding led by General Atlantic will fuel that continued growth. It is the first investment made by the US-based growth capital investor in Africa, adding to the growing list of startup investors who have led growth rounds over the past two years, such as FTX, Avenir, SVB Capital and Fidelity.
“General Atlantic is thrilled to announce our first technology investment in Africa in Reliance Health, supporting a team focused on improving the quality of healthcare for millions of patients in Nigeria and abroad,” said Chris Caulkin, Managing Director, General Atlantic and head of EMEA Technology in a statement.
“We are constantly impressed by Femi and Ope, who exemplify the entrepreneurship and innovation we see across the African continent.”
Other investors involved in the round include Partech, Picus Capital, Tencent Exploration, Africa Healthcare Master Fund, P1 Ventures, Laerdal Million Lives Fund and M3 Inc.
This investment is coming two years after the company’s $6 million Series A in January 2020. Reliance previously raised $2 million in seed rounds post-YC in 2017. Investors in both rounds include Partech, Y Combinator, Golden Palm Investments, Ventures Platform, Lofty Inc– and Tencent and Picus, which participated in all three rounds totaling $48 million.
The chief executive said that Reliance Health plans to use part of the funding to build two more clinical facilities in two Nigerian cities, Abuja and Port Harcourt. Reliance Health is also looking to hire talent and scale new product lines, especially for Nigerians in the diaspora.
The healthtech company will expand into new markets. Egypt tops that list, with Reliance Health already hiring a country manager to launch in the middle of this year. Kuti adds that the company will enter two or three countries before the end of the year.
After years of funding initiatives supported by governments and donors, venture capital in African health technology is on the rise. In 2020, healthcare tech startups across the continent raised less than $100 million, but that number increased to $370 million last year, according to reports on the African venture capital landscape.
While the sector still accounts for less than 10% of total funding, major rounds over the past two years from startups such as Vezeeta, Helium Health, 54gene, mPharma, Africa Health Holdings and now Reliance Health mean that African health technology is maturing market drivers. , such as the pandemic, population size, data analytics and consumer focus.