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Startups Trying to Fix Nigeria's Broken Healthcare System Are Winning Global Investor Interest (Quartz)
July 10, 2019
From the article:
"Health-focused startups have been low-profile players in Nigeria’s burgeoning tech ecosystem over the past decade—but that’s starting to change.
Startups identifying gaps in the healthcare delivery value chain across Africa’s most populous country are increasingly winning investor attention and dollars. The sector reached a milestone this month as 54gene, a genomics company focused on African DNA, raised $4.5 million in a seed round—the largest by a Nigerian health tech startup. Investor participants in 54gene’s seed round included Y Combinator, Fifty Years, Better Ventures, KdT Ventures, Hack VC and Techammer.
While the investment size pales in comparison to other sectors such as fintech which is characterized by bigger-ticket funding rounds, it reflects the nascent nature of the health-tech startup space, not just in Nigeria but across the continent.
In the long-term however, health tech startups are likely to experience a growth path mirroring fintech startups given their crucial similarities in solving fundamental problems. Like fintech startups, health tech startups are often building technical infrastructure from scratch and innovating solutions in a sector that has been slow to evolve over the years.
Given the several low-hanging opportunities—ranging from drug distribution and insurance to medical records and data—to resolve inefficiencies across the sector, health tech startups are likely to command larger investment amounts as they prove product market fit and become embedded in the value chain.
Six months after its founding, 54gene’s record seed round will be deployed to fund its ambitious plan to bridge the lag in African genomic data and research by creating the world’s largest and first African biobank. It’s a lofty target given the continent has contributed only 2% to global genomics data. “We haven’t been invited to the table where decisions as regards our healthcare have been made,” says Abasi Ene-Obong, founder of 54gene.
The net effect of is that drugs development is hardly based on African DNA while drugs also typically reach African markets many years after being launched and often at high prices. Last month, a report by the Center for Global Development found users in low and middle-income countries pay up to 20 times the “minimum international reference price” of basic medicines. To bridge the gap, Ene-Obong says 54gene will ensure that developed drugs based on its genome samples are trialed and used in Africa first as it focuses on studying diverse African DNA samples to find “naturally occurring mutations” which can be modeled as drugs to treat both Africans and non-Africans..."