While equity funding surged in 2023, accounting for the lion’s share of investments in African healthtech, grants continued to play a vital role in supporting early-stage innovation, according to a new report by Salient Advisory.
Despite a general funding downturn across the continent, the healthtech sector demonstrated resilience, largely driven by a few significant funding rounds. However, the report highlights the continued importance of grant funding, which provides crucial support for startups to validate their business models and navigate the early stages of development.
“Grants create a safe space for innovators to experiment and prove their concepts without the immediate pressures of equity investments,” explains Yomi Kazeem, Engagement Manager at Salient Advisory. “This allows them to build a strong foundation and achieve a level of scale that makes them more attractive to equity investors.”
The report also underscores the growing maturity of the African healthtech ecosystem, with a notable increase in later-stage funding rounds. While this indicates investor confidence in the sector’s long-term potential, it also highlights the need for continued support for early-stage startups to ensure the sustained growth of the ecosystem.
“The addressable market for healthtech solutions in Africa is immense,” says Kazeem. “The challenge now is to nurture a diverse pipeline of innovative startups and provide them with the necessary resources to scale and deliver impactful solutions to the continent’s pressing healthcare needs.”
