This post is part of our series on SEAD’s recent visit to East Africa to work with our innovators in the field and put on events in Nairobi focused on healthcare innovation and scaling in East Africa. Learn more about the trip here.
Right now is an exciting time to be involved in global health innovation. Organizations are creating amazing, innovative ideas that have the power to improve the lives of millions of people. But an innovative idea alone is not enough to transform healthcare. You also need money.
For that reason, Investors’ Circle and CASE i3 worked together during the SEAD East Africa visit to hold a series of events in Nairobi, Kenya, to connect and inform both local and global health investors about each other’s work as well as help highlight the innovative solutions to health that are growing into investable ventures.
Investors’ Circle brought several experienced US angel investors to Kenya and together they visited more than nine local healthcare ventures in and around Nairobi. They also held an Investor Forum on September 17th which was attended by over 15 investors, including representatives from organizations such as Eleos Foundation, Intellecap, Anthos, Calvert Foundation, Pharm Access, iDev International, Novostar, Alpha Mundi and more.
At Investors’ Circle Investor Forum: Nairobi 2015, investors reviewed the findings from SEAD’s recently completed report Opportunities and Challenges for Global Health Impact Investors. They also shared the opportunities, trends and challenges of investing to improve healthcare outcomes in Kenya based on their own local experiences. Key trends from these discussions included:
- Explorations of the limitations on customers’ ability to pay and exposure to different healthcare innovations on the ground. While healthcare spending and consumer awareness is still low in Kenya, many anticipate healthcare spending will increase disproportionately to Kenya’s overall projected growth by 2020.
- The need and opportunity to invest in “ultra low-cost” diagnostics and equipment for use in facilities serving lower-income citizens. Many venture investors in attendance found the most opportunity for equity capital in product innovation and service efficiency surrounding clinics.
- New government policies, such as the new per person per month capitation limit on clinical reimbursements, which will change the landscape for future enterprises and investors. One later-stage investor expressed concern about the new regulation limiting payments. Other investors responded by saying the fee, though low now, is a start toward a more rational pricing environment that will ultimately enable more innovation.
Following the Capital Roundtable, five entrepreneurs pitched their ventures to this elite group of investors. A wide range of enterprises pitched, including SEAD innovator Penda Health, a low-cost, high-quality clinic in Nairobi that has reached break-even across its current facilities and is looking for expansion capital. Nick Sowden, co-founder of Penda Health, noted “60% of Kenyans have indicated they would not return to the last place they went to receive healthcare,” a clear signal that there is a business opportunity for clinics like Penda in the Kenyan system.
Other enterprises included several health-influencing businesses such as GreenChar, a clean charcoal briquet provider. According to GreenChar, more than 1 billion people in Africa cook with firewood or charcoal and estimates don’t show that number dropping before 2020. It’s easy to imagine the health and environmental benefits of providing a clean charcoal option to these families.
After the pitches, Investors’ Circle ran its trademark “investor deal debrief” in which investors discuss their reactions and histories and start making plans for joint due diligence on the deals. The day culminated with the Investor Reception, co-hosted by SEAD, which allowed over 65 investors, entrepreneurs, foundations and others to network around shared interests.
The East African healthcare industry is quickly expanding with tremendous room for growth and innovation. By hosting events like the Capital Roundtable, we can help foster that innovation by connecting promising ventures with the capital they need to scale their growth. Several investors expressed excitement to make new connections, with one commenting “I’m happy to see so many new-to-me faces here!” Those connections are ones we aim to continue to foster in these burgeoning markets.