Frustrated by the lack of pathologists in African hospitals and the slow pace of test results, Kenyan doctor Joshua Kibera thought he had the answer.
Kibera envisioned a business that would be a cross between a ride-sharing business and a utility, which would link African hospitals and medical facilities with pathologists and laboratories, both locally and internationally.
The problem was that Kibera lacked the funding to get his idea off the ground. But, when he attracted $50,000 in seed funding from Villgro Africa, a Kenya-based healthcare-focused start-up incubator, his vision became a reality: in 2017, The Pathology Network was born.
Aside from the money, Villgro Africa’s advice was key to launching The Pathology Network, Kibera says, and encouraged other international investors to invest an additional $175,000 in the company.
“I was clear about the problem I was solving, but our business model was not well defined,” says Kibera. “Villgro Africa’s portfolio manager had frequent meetings to help us think through modeling, cash flow, etc.”
Villgro Africa, whose parent company was born in India 20 years ago, expanded into Africa in 2014 to develop new healthcare and life sciences businesses, with a focus on financial viability.
The non-profit group raises funds from high net worth individuals, family offices and foundations, and distributes grants in the form of seed funding to entrepreneurs and start-ups.
Based in Nairobi, the Kenyan capital, at the heart of the “Silicon Savannah” technology hub, Villgro Africa has funded start-ups in East Africa and across the continent, in Mali, Burkina Faso, Senegal and Cameroon .
“In the Northern Hemisphere, if you’re a business person or a Masters or PhD student with an innovative idea with market potential, the money finds you,” says Rob Beyer, co-founder of Villgro Africa. . “In sub-Saharan Africa, this story is incredibly rare.”
Backed by donors including the U.S. Agency for International Development and the International Development Research Center in Canada, Villgro Africa itself takes an equity stake in some of the companies it supports and recycles exit proceeds into additional grants. . To date, the incubator has deployed more than $1.2 million across 40 companies, with a focus on healthcare.
“Healthcare and life sciences was an underserved market,” says Beyer, describing Villgro Africa’s funding as “more like venture capital than an accelerator; we donate money, but we also support businesses, sometimes for years”.
The Pathology Network gives hospitals a digital account to order sample tests, which it collects and distributes to a network of labs and pathologists in Kenya, other countries in Africa and as far afield as Australia and United States. It can deliver results within a fortnight, rather than the months they might otherwise take.
In the case of diseases such as cancer, the incidence of which is rise in Africa – shaving off that timeline could mean the difference between life and death.
Although Villgro Africa’s decision to focus on health brings financial benefits to the companies it supports, it requires more patience than fintech or consumer software, for example, due to the barriers and additional costs of clinical trials, approvals and regulation.
The challenges are tougher in hardware, given the high bar for quality control, supply chain management issues and lack of manufacturing capacity in Africa.
However, for Wambui Nyabero, CTO of Villgro Africa, the price is worth it. “Hardware is the platform on which everything else is built,” she says. “If you want to do AI or applications, if you don’t have the hardware to diagnose and treat, you’re missing a big chunk. Even if the hardware is hard, it’s worth it.
As companies progress through the product development process, they gain experience that will help them in future hardware projects.
Beyer cites the example of a Ugandan start-up supported by Villgro Africa, called A-lite, which designed, built and tested a newborn vein locator. It allows clinicians to identify barely visible veins in babies non-invasively. “This team now knows the whole process of bringing a new medical device to market,” he says.
African health tech start-ups could receive a boost if the continent could set up a regional regulatory body to approve new medical devices and therapies. In 2019, the African Union adopted a treaty to establish the African Medicines Agencyan agency related to the US Food and Drug Administration, which would authorize drugs on the continent.
Nyabero says the AMA could help start-ups in the long run. “Having something like this across Africa is going to be great because it means if you get approval in one country, you get approval in all of Africa, so now your market has just opened up. “