Investing in Health Tech: People Required
BHI’s recent spate of investments in health tech in East and West Africa aim to empower great people with technology
Not long ago in Nairobi, it took an average of 162 minutes to get to a hospital if you called an ambulance — before doctors even started working. Why? The answer is not traffic. Despite there being more than 100 private, public and Red Cross-owned vehicles, a patient in an emergency would have to call each individual provider, find the closest ambulance, detail the problem, and decide if dispatching this company was the right decision . The broader healthcare system in Kenya and many other countries is a patchwork of public and private systems that do not communicate and have little incentive to work together, making for a challenging user experience. For years, technology has hovered around the edges, but the perceptions of expense, distrust, and the reticence of providers to try new methods of care meant patients continued to suffer and little improved. This problem isn’t unique to Africa. The US has the most expensive healthcare system in the world, and for most Americans, navigating an emergency is a nightmare.
At Blue Haven Initiative, we’ve long seen that the intersection of human interaction and technology will drive better, cheaper, and more useful services in settings where traditional infrastructure lags behind. Few places are better suited to this thesis than sub-Saharan Africa. Infrastructure is just being built and there is a chance to build in lighter distributed capacity connectedness to improve access. Technology cannot solve every problem on its own but including the right level of people can be an attractive opportunity for investment. For seven years, we’ve tested this thesis with our investments in tech-enabled startups in financial services, logistics, and renewable energy. 2020 was the year we added health.
Our first foray into healthcare was pre-pandemic, leading the Series A for Field Intelligence, a company focused on digitizing and financing the last mile of pharmaceutical supply chains. Pharmacies are small businesses with ordinary problems that are exacerbated by the price and controlled nature of their inventory. Working capital is hard to come by and adopting technology is not easy, even though better demand forecasting would lead to fewer stockouts and higher sales. Field attempts to bring sophisticated supply management to bear, rolling up demand to negotiate better pricing and help store owners improve operations. Here’s more on why we backed Field.
Shortly after we closed the Field investment, COVID-19 hit. Precious hospital resources from beds to medical devices as well as the capacity of health professionals were — and remain — in short supply. Healthy patients stayed away from Covid hot zones (most medical facilities) and avoided routine care and elective treatment. But one other thing happened. People became a lot more willing to try new things to access healthcare. Leveraging technology to meet patients where they are — in their homes — became of utmost importance. Overnight, the intersection of health and technology became eminently investable. Since then, we’ve closed two additional investments in health tech: Flare and, just last month, TIBU Health, both of which use expertise in technology to simplify systems that are fragmented and hard to use in the best of times, but near impossible in a pandemic.
Flare aggregates existing emergency-response infrastructure in Kenya through one phone number (0711 911 911, similar to 911 in the US), dramatically improving the chances of surviving an accident. The system of private ambulance companies, hospital-owned vehicles, the Red Cross, and other evac-equipped vehicles like planes and helicopters existed before, but each had its own individual call number, and there was little guidance on which hospital best met the needs of a patient — one should go to different places whether you’re having a baby or a heart attack. Though Flare picks up anyone in need, the main source of revenue is an insurance product, Rescue, that provides members different levels of access to emergency benefits dependent on price, while nonmembers can access basic road ambulance coverage on a fee per use basis. Flare’s customers are now more often routed to fit-to-purpose facilities more quickly, reaching a doctor in 60 minutes or less, 102 minutes faster than before.
While Flare is building a technology solution for emergency-care, plenty of routine healthcare situations were disrupted by the pandemic. Basic care has been neglected as patients avoid hospitals. People were reluctant to wait in line for a covid test for fear of exposure. Even outside of pandemic times, patients don’t give hospitals the highest ratings in any part of the world. Centralized care systems are inconvenient and expensive. Where infrastructure for health is still in development, governments and private actors can put technology at the center of the system. Critical medical devices are getting smaller cheaper and mobile. Combined with widespread internet access, new models break down the system to reach more patients with better care at a lower price. This distribution of assets has already happened in many other industries across the continent. Traditional banking has been outpaced by more agile digital-only banks that focus on the customer and rely less on expensive branch-based infrastructure. Energy access is increasingly distributed. Mini-grids and pay-as-you-go solar provide households and businesses with more reliable electricity at lower prices than national grids.
Enter TIBU. Like Flare’s model, TIBU makes a complicated system of un-networked and underutilized assets less complicated through technology. The co-founders came together to solve for pieces of a much larger health crisis; Jason Carmichael spent most of his career solving global health delivery problems, Dr. Hanane Akrim in medicine, and Peter Gikera in technology. Leveraging the group’s experience, TIBU’s platform aggregates medical services and enables users to seamlessly book everything from a Covid test and basic blood work to regular antenatal care and routine wellness checks. A finely tuned backend logistics system then manages a network of mobile, highly qualified, health professionals, dispatching them to a customer’s home or office within hours. Customers receive high-quality treatment in a more comfortable and convenient place, and clinicians escape chronic underemployment that drives nearly 30% of nonphysician healthcare workers to leave the profession. Since launching into the heart of Covid, demand for TIBU’s services has exploded, almost entirely through word of mouth. First-time customers tend to need a Covid test, but repeat business increasingly focuses on non-Covid services as users settle into the idea that care at home might be the new normal.
The COVID-19 pandemic and increased investment in health tech underscore the opportunity at the intersection of human and tech. Hospital care will always be a critical part of every national healthcare system, but building technology into the system provides a faster, more capital-efficient framework for improving services as they stand today. Because there is always more work to be done to ensure sustainable and equitable growth, Blue Haven will continue to seek solutions at the intersection of technology and great service in healthcare and beyond.
