HealthTech In Egypt: A Growing Opportunity for VC Investments

As we witness the disruptive impact of COVID-19 on various industries, we must also acknowledge the opportunity that it has presented to the HealthTech industry to demonstrate its collective healing potential. This is clearly observed in its ability to not only assist in alleviating the burdens of the pandemic at its peak, but to also transform and innovate the healthcare industry at large.

Digital healthcare has been thriving globally, with players such as Teladoc Health and Babylon Heath exhibiting growing popularity. In fact, the year 2018 saw a record $8.1b invested in HealthTech globally. In 2019, six US-based digital health companies went public, growing their combined market cap to $17b as of January 2020, after a three-year IPO drought. It comes without a doubt that founders in MENA are also eager to ride the HealthTech wave. According to the 2020 Global Ventures Digital Health report, the e‐Health market in MENA was valued at US$989 million in 2019, and is projected to reach US$1.8 billion in 2024, growing at a CAGR of 12.8%.

Egypt is a particularly fierce competitor in this wave, venturing into some of the most innovative digital solutions ranging from telemedicine, diagnostics, and health insurance. E-health is rapidly expanding in the country, with Cairo-based startup Vezeeta tapping into ePharmacy and telehealth by making medical assistance available through a mobile app. Launched in 2012, Vezeeta serves as an online appointment scheduling service, connecting doctors and patients while also enabling patients to rate or review their healthcare experience. The company aims to act as the “glue” that strengthens bridges between healthcare providers and patients, and in the process, acts as a key quality enhancer in the overall system. Vezeeta has successfully expanded across 8 different countries in the region, and already secured rounds of investments through venture capital. The company aims to use its newly raised Series D funds to support their growth plans which include offering new products and services in ePharmacy and telehealth services across its existing footprint and in new markets. Another exciting prospect for Vezeeta is its vision toward regional expansion, eyeing Nigeria and Kenya in particular.

Similarly, Chefaa, a digital pharmacy app, launched in 2017, has greatly assisted patients in Egypt during the pandemic by enabling them to order, refill or schedule prescribed medicine for pickup or delivery. Co-founded by doctors Doaa Aref and Rasha Rady, Chefaa aims to spearhead the digital transformation of the pharmaceutical industry within and beyond Egypt using the seven-figure Pre Series A investment they acquired in August 2019. Yodawy is another case in point in e-pharma. This start-up offers a range of services from digitizing prescriptions to a, state-of-the-art, AI insurance approval engine localized to suit the market. Founded in 2018, Yodawy aims to make the market more efficient by bridging infrastructure gaps including the mismatch of supply and demand for medicine, as well as the processing of claims, as explained by co-founder and CEO, Karim Khasaba, to Enterprise. The company currently operates with a network of over 2500 pharmacies across 30 cities in Egypt, while also offering their users 24/7 customer support and a loyalty program.

Altibbi is a Jordan-based application that recently expanded to Egypt, and took the market and the entire region by a storm. Founded by Dr. Abdel Aziz Labadi and his son Jalil, Altibbi, it was first launched in 2008 as an Arabic Medical Glossary, in an attempt to make these resources available to the Arabic-speaking masses. Two years later, the glossary was transformed into a multi-service medical website, with the aim of reaching as many users as possible. The platform provides reliable medical information through an encyclopedia of medicine and thousands of articles and tips, as well as remote consultations with accredited doctors directly by phone or text. Arabic medical content generation has allowed Altibbi to lead the wave in educating and empowering patients in MENA to self-care. Altibbi currently operates in 10 Arab countries with over 20 million users, 12k+ doctors and over 3 million answered medical questions. The platform has won the World Summit Award for Best Digital Health Content and the Schwab Foundation for Social Entrepreneurship award.

Other players in the market include 3elagi, BelShifa, 7keema and PaşHakeem. 3elagi, considered the Egyptian healthcare equivalent of Trivago, offers a solution that connects consumers with pharmacies, labs and healthcare providers in the formers’ geographical area. With a simple application and web interface, customers can not only easily make their requests for medication, but also choose from an array of service providers willing and able to fulfill their requests on time. All they have to do is upload their prescriptions or ask about a specific symptom or medication, wait while the app compares prices and availability of different pharmacies within range, and then select their preferred option. Similarly, BelShifa is a pharmacy delivery app that enables patients to order medicines online via  a simple photo upload of their prescription to the app. It mainly allows patients to find their medications and healthcare products in the nearest available pharmacy.

Meanwhile, 7keema and PaşHakeem act as on-demand mobile applications specialized in home-based medical services. 7keema’s focus is to offer nursing services at home, namely child care, elderly care, therapeutic and personalized care for people with special needs, and even wound care for post-surgical treatment at home. The ISO certified app provides patients with high quality and reliable nurses immediately or scheduled for a later time. Since inception in 2017, it has been awarded best startup in Egypt at SeedStars Competition. PaşHakeem, the Uber of on-demand doctors, allows its users to book or instantly request a doctor for home visits. The app leverages the power of AI to diagnose illnesses and recommend the best care through an interactive chatbot. Users can track their requested doctors live, and both doctors and patients can rate their visits and view their visit history, which enhances the overall quality of the service provided.

Last, but certainly not least, online therapy is being normalized in Egypt with Shezlong. Founded in 2015, this one-of-its-kind start-up currently has a community of over 150 therapists on board, from which users can filter and select the one that best suits their mental health needs. Shezlong allows users to book and talk to therapists online through video conferencing, anytime and anywhere. This platform prioritizes mental health and wellbeing, offering a range of affordable options for its users as well as free sessions as a result of increasing anxiety, stress and depression from the ongoing COVID-19 pandemic.

Although new players are emerging, the bureaucratic regulatory environment of Egypt still stands as an obstacle to digital health investments. Government authorities have yet to grasp and alleviate the complexities of a healthtech startup’s business model. Current regulations  still hinder the incorporation of  a company in Egypt, thereby making offshoring to countries  with more contractual flexibility and better governance mechanisms a common and continuing practice. Nevertheless, as healthtech investments evolve alongside the industry, innovative products and business models, that are not only different but also based on data-driven insights, are expected to be the hallmark of sustainability in this field.  

It is fair to say that Egypt, and MENA, will serve as an attractive investment environment in the coming months, as telehealth adoption and more lax regulations accelerate throughout the region. We, at Global Ventures, have partnered with Helium Health, West Africa’s leading Electronic Medical Records provider, as the need for healthcare data and inclusion in emerging markets becomes more pressing than ever.  The COVID-19 pandemic has brought this sector into the spotlight, due to its ability to bridge the growing gaps between patients, doctors and pharmacies. 2020 has elevated a number of industries, and enabled them to thrive and grow, but the long-term trajectory remains a topic of debate. Take e-commerce for instance, will we continue to see the growth of e-commerce stickiness in e-pharma? Will consumers adapt to the idea of teleconsultation to reduce travel time and long wait times? The answers to these questions, and many more, are yet to be revealed...  

At Global Ventures, we are excited about the digital health space and its unique position and potential to innovate and disrupt traditional healthcare.