Nigerian healthtech startup Reliance Health raises $40M led by General Atlantic
Over the last three years, health tech has gotten more attention than it has in the past and this has attracted a lot of investment into the sector. This growth can be attributed to the COVID-19 pandemic which has accelerated the use of telemedicine, virtual car and drug delivery.
A lot of African start-ups have benefitted from these investments with the focus being on Reliance Health. The Lagos and Texas-based digital healthcare is the latest beneficiary by being able to raise $40 million. The Series B is the largest of its kind in the African Health Tech.
Reports say health tech in Africa should reach a market value of over US$11 billion by 2025, and Reliance Health is looking to play a pivotal role in the continent reaching that capitalization.
Reliance Health was founded in 2016 by Femi Kuti, Opeyemi Olumekun and Matthew Mayaki. The digital health tech makes use of an integrated process that gives health insurance and telemedicine with their partnering hospitals and healthcare facilities.
“Our mission is super simple. I mean, the definition is simple, but the execution is sometimes more difficult than that,” chief executive Kuti said on a call. “So essentially what we’re trying to do is to use technology to make quality health care accessible and affordable in emerging markets.”
Kuti’s comment brings to light challenges being faced in the Nigerian healthcare system which are accessibility and affordability. It is very common for people in developing countries such as Nigeria to take healthcare for granted. This is because there are no proper structures that ensure optimal care so people tend to take whatever healthcare is available.
Hospitals have no proper means of charging patients fees that are not too high or too low but just enough so that people can afford them.
Reliance Health has found a way around these challenges so that users have access to a range of healthcare products via subscriptions. Some services are directly delivered by Reliance Health and these include telemedicine, a drug delivery system and two clinics in Lagos. Other services are provided by third parties such as hospitals, diagnostic centres and pharmaceutical centres.
Reliance was formerly Kangpe, launched in 2015 by the three co-founders. They had a slogan that said, “doctor in your pocket”. But shortly after launching the business, they realised there were too many gaps to be filled hence pivoted to Reliance.
“Back then, for example, if a patient chats with this doctor and he recommends an x-ray checkup or after that, a surgery, what happens next?” he queried. “We weren’t able to manage all those [end-to-end] processes and that necessitated sort of a soft pivot from the whole telemedicine focus thing to this integrated healthcare provider that we’re doing today.”
Reliance Health has two modes of operation which are; business-to-business and business-to-customers models. Reliance HMO is the company’s health insurance plan for both sets of customers where individuals can select monthly, quarterly or yearly health plans ranging from ₦3,500 (~$7.00) to ₦148,500 (~$297.00). On the other hand, businesses can make subscriptions on behalf of their employees, which Kuti said are slightly cheaper than plans used by retail customers.
With the Reliance Health app, users have access to talk to a doctor, find healthcare providers near them, get medications from health centres or have them delivered to them from the pharmacies. With frequent usage, Reliance can make suggestions for lifestyle modifications depending on user diagnosis and also referrals to the hospital if a user spends hours on the line.
“Essentially, what we try to do is to guide people to the best option in terms of the care that we can receive,” Kutin said. “And regardless of that option is provided by a third-party partner or us, we are more concerned with how we work with the customer to guide them to the best option when it comes to accessing the healthcare data.”
“General Atlantic is thrilled to announce our first technology investment in Africa in Reliance Health, backing a team focused on improving healthcare quality for millions of patients in Nigeria and abroad,” said Chris Caulkin, the managing director of General Atlantic and head of EMEA Technology in a statement.
“We have been consistently impressed by Femi and Ope, who exemplify the entrepreneurialism and innovation we see across the African continent.”
In January 2020, the company launched Series A which raised $6 million. Prior to that in 2017, Reliance in a round seed raised $2 million. Some investors in both rounds Partech, Y Combinator, Golden Palm Investments, Ventures Platform, LoftyInc Capital — and Tencent and Picus, have participated in the three rounds totalling $48 million.
Reliance’s Chief Executive Officer said they have plans of using a part of the funds to construct two more clinic facilities in Abuja and Port Harcourt. They also plan to recruit more personnel and add up new product lines for Nigerians abroad.
The company also seeks to expand into new markets with Egypt being on top of the list. Reliance Health is already set to hire a country manager in Egypt by mid-year and be present in two or three countries before the year runs out
A number of factors such as the pandemic, population size, data analytics and consumer-centricity are the backbone behind the current buoyancy of African Health tech. It has created recognition and attracted investors into the sector.