ABA Editorial · Jun 16, 2025 · 13 min read
African healthtech is in a reality check phase. 54gene collapsed. Medsaf shut down. Ilara Health laid off staff despite a USD 4.2 million round. Reliance Health reduced headcount. mPharma restructured. The pandemic-era momentum has given way to a more grounded phase where only durable models survive. This report synthesizes where the sector sits at the start of 2026 and what the structural conditions look like for the next phase.
African healthtech in early 2026 is in what industry observers have described as a reality check. The sector rode a wave of pandemic-era enthusiasm between 2020 and 2022, attracting investor attention as COVID-19 made digital health solutions suddenly indispensable and as the underlying need for healthcare innovation on a continent with some of the world's lowest doctor-to-patient ratios became impossible to ignore. In the years since, several high-profile operators have shut down, restructured, or pivoted sharply away from the growth-at-all-costs model that initially attracted capital. 54gene, once one of the most visible African genomics companies, collapsed. Medsaf, a Nigerian pharmaceutical supply chain platform, shut down operations. Ilara Health, a Kenyan medical diagnostics operator, laid off staff despite closing a USD 4.2 million funding round. Reliance Health, the Nigerian insurance-technology hybrid, reduced its workforce by more than 100 employees as it sought to reach break-even. mPharma, one of the most prominent pharmacy-focused operators, restructured around partnerships with existing pharmacies and hospitals rather than continuing the multi-country expansion model that had defined its earlier phase. This report synthesizes where the sector sits at the start of 2026.
The underlying case for African healthtech has not weakened. Sub-Saharan Africa has some of the world's lowest doctor-to-patient ratios, with some countries registering fewer than one doctor per 5,000 people. Healthcare infrastructure is concentrated in urban areas while the majority of the population lives in peri-urban and rural areas with limited access to formal care. Drug supply chains are fragmented, subject to counterfeiting, and poorly integrated with clinical information systems. Health insurance coverage is low across most of the continent, leaving households to pay for care out of pocket or forgo treatment entirely. Each of these structural realities represents a problem that technology could address. The question is not whether the problems exist but whether operators can build business models that address them at sustainable unit economics.
A small number of operators have captured the majority of African healthtech funding. In 2023, five startups (Helium Health, Kasha, MYDAWA, Yodawy, and Remedial Health) accounted for approximately 59 percent of all funding in the category, according to sector analysis from Salient Advisory. Online pharmacy solutions captured approximately 38 percent of 2023 funding, driven by Series B rounds for Kasha (USD 21 million, the largest ever investment in a woman-led African healthtech company), MYDAWA, and Yodawy. Women-led startups saw more than a 2,000 percent increase in funding between 2022 and 2023, reaching approximately USD 52 million driven by deals for Kasha, Dawi Clinics, Chefaa, and Maisha Meds.
This concentration pattern is similar to what has played out in African fintech and agritech: a handful of operators with demonstrated execution and scale capture most available capital, while a long tail of smaller operators struggle to raise follow-on rounds at acceptable terms. The concentration is not necessarily unhealthy for the sector as a whole, because concentrated capital deployment can produce durable operators. But it does mean that new entrants face a difficult fundraising environment unless they can clearly differentiate from existing leaders.
The defining shift in African healthtech over the last two years has been the pivot from growth-at-all-costs to sustainability and partnerships. mPharma's restructuring is the clearest example. The company, once known for aggressive multi-country expansion and direct pharmacy operations, has refocused on partnerships with existing pharmacy chains and hospital systems, reducing the operational complexity that was undermining its unit economics. Helium Health has emphasized its successful expansion into Saudi Arabia since 2021, demonstrating that African healthtech can compete in global markets when it finds scalable models. Babyl in Rwanda has leveraged a government partnership to reach millions of users through digital consultations.
The insurance-technology hybrids, including Reliance Health in Nigeria and Turaco in East Africa, represent another adaptation. Both operators address the payer problem (the fundamental difficulty of extracting payment from individual patients for healthcare services) by spreading risk across larger groups. Insurance-based models potentially offer more sustainable revenue than direct-to-patient transaction models, though both Reliance and Turaco have faced their own operational pressures during the sector downturn.
African healthtech has a complicated relationship with donor and development finance capital. Commercial venture capital has pulled back from the category since 2022, but development finance institutions, philanthropic funders, and bilateral donors have continued to make meaningful commitments. The Gates Foundation granted USD 5 million in 2025 to support African healthtech initiatives. The NEPAD Agency provided USD 12 million in catalytic grants supporting over 250 young innovators. Afreximbank has been implementing a USD 2 billion facility dedicated to healthcare and health product manufacturing across the continent.
The donor capital has kept parts of the ecosystem alive that commercial capital alone would not sustain. It has also created a distinctive capital stack where African healthtech operators frequently combine grant funding, concessional debt, and commercial equity in ways that are unusual in most other sectors. The sustainability of any individual operator often depends on the specific mix of capital it has assembled and whether that mix can continue to be refreshed as existing commitments are drawn down.
Three indicators will shape African healthtech. First, whether the remaining leaders (Helium Health, Kasha, mPharma, Reliance Health, and a handful of others) demonstrate durable path to profitability or continue to restructure under commercial pressure. Second, whether new entrants can find sub-categories that the existing leaders have not saturated, particularly in underserved geographies or patient populations. Third, whether donor and development finance commitments continue to sustain the ecosystem through what is likely to remain a difficult commercial environment. African healthtech is not in retreat, but it is in reconstruction. The operators who emerge from this phase with viable business models are likely to define the sector for the next decade.