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Produced by Middle East Entrepreneur and Lucidity Insights, ‘The Business of Healthtech in MENA’ is a report examining innovation in the region’s healthcare sector in 2023.
Here is a list of 10 key insights you can glean from this report.
1. Israel, Oman, Turkey and the UAE are among the top 20 global economies in healthcare efficiency
Source: Lucidity Insights
The Bloomberg Health Efficiency Index was first conducted in 2013 and tracks life expectancy and health spending to determine which health systems deliver the best results around the world. The top three most efficient healthcare systems are occupied by Singapore, Hong Kong and Taiwan, followed by South Korea and Israel among Asian countries. UAE has her 13th most efficient healthcare system in the world, Oman and Turkey have her 18th and her 19th most efficient healthcare system in the world.
2. MENA has the lowest health spending as a percentage of gross domestic product (GDP), but the highest out-of-pocket spending as a percentage of expenditures. This is probably partly due to the younger population.
Source: Lucidity Insights
MENA has one of the highest out-of-pocket expenditures in the world. High out-of-pocket medical costs are often associated with negative health outcomes. Due to bad spending habits or cases of poverty, prescribed treatment plans are often not adhered to when a person has to pay a 30% co-payment for medicines and treatments. Because these treatments, screenings, and tests are expensive, people are less likely to see a doctor for simple tests or preventive medications.
Source: Lucidity Insights
Of course, many argue that the MENA region has the world’s youngest population and access to health services is rare. A country’s demographics certainly influence a country’s health care spending and out-of-pocket policy. In countries like the United Arab Emirates, the number of people aged 60 and over will increase from 3% to 20% of the population in 2020, making the region particularly vulnerable to growth in the GCC countries over the next two decades. It is likely that changes will be seen. Population by 2050.
Source: Lucidity Insights
Source: Lucidity Insights
3. Healthtech funding in MENA (excluding Israel) has steadily increased over the past 15 years
Source: Lucidity Insights
Source: Lucidity Insights
4. MENA (excluding Israel) health tech companies will total enterprise value of more than $1.5 billion in 2022, a 22x increase since 2016
Source: Lucidity Insights
Health tech is experiencing explosive growth in the region, with valuations of health tech startups increasing significantly since the start of the coronavirus pandemic in 2020. Interestingly, some startups founded in the 1990s and 2000s have also increased in value. Founded since the 2010s, it is one of the most highly regarded companies today.
Comparing the five-year growth trends from 2016 to 2021 by sector, health tech startups had the highest valuation growth, followed by food tech and marketing (software as a service) companies. It continued. This is likely due to both the drive shown during the pandemic, which quickly educated both consumers and healthcare providers about the value of technology for increasing efficiency, as well as new technologies that have come online and seen an increase in recent years. It is thought that this tells the story. A business model that has already proven itself on the world stage is coming to the MENA region.
Related: New report by Arowana Impact Capital, in partnership with Middle Eastern entrepreneurs and Lucidity Insights, looks at the business of impact investing
5. In line with global trends, care delivery has become MENA’s largest healthtech sector by funds raised
Source: Lucidity Insights
Care delivery is the most funded health tech industry in MENA (excluding Israel), accounting for 39% of total funding flows, followed by administrative workflow startups with 30% of venture capital (VC) funding has been acquired. Digital therapeutics rounded out the top three with $97 million invested, accounting for 16% of all VC funding in health tech in the region.
6. UAE is the hub of health tech startups in the MENA region
Source: Lucidity Insights
Aside from Israel, the UAE is the undisputed hub for healthtech startups in the MENA region. UAE health tech startups have raised more than $460 million in funding to date, 6.2 times more than second-place Egypt. This means that 75% of all VC funds going to MENA healthtech will go to UAE startups.
7. 9 out of 10 of the most funded health tech startups in MENA (excluding Israel) are headquartered in the UAE
Source: Lucidity Insights
Nine of the 10 most-funded health tech startups in MENA (excluding Israel) are headquartered in the UAE. Administrative workflows that facilitate online doctor and clinician bookings are the richest subsector, followed by telemedicine and care delivery players that facilitate online doctor bookings. Bayzat and Vezeeta are both the leading booking platforms in fundraising, raising $96 million and $68 million respectively.
8. 93% of health tech startup funding rounds in the MENA region are less than $10 million, with Seed and Series B raising the most combined funding to date
Source: Lucidity Insights
Source: Lucidity Insights
9. 38% of health tech startups in MENA (excluding Israel) have successfully raised two or more rounds of funding
200 health tech startups in the MENA region (excluding Israel) have successfully raised at least one round of funding. 38% have successfully raised his money twice or more. 17% were successful in raising three rounds of funding, and 10% were successful in raising four or more rounds. This shows that although there is a healthy maturation of health tech startups in the region, there is still significant room for growth.
Source: Lucidity Insights
10. Domestic investors account for the majority of health tech investment in MENA
Source: Lucidity Insights
Health tech startups don’t have to travel much outside their region to access funding, data shows. 80% of all VC investments in health tech startups are made by MENA-based investors and funds. 11% of the funding comes from Europe, followed by 7% from the US. Dedicated health tech funds were almost unheard of before the pandemic, but there are now more than eight funds dedicated to investing in healthcare and health tech, totaling more than $2 billion. .
Source: Lucidity Insights
To learn more about transformative innovations in digital health in 2023, read the full report here.
This article was originally published on Lucidity Insights, Entrepreneur Middle East’s partner in developing special reports on the technology and entrepreneurial ecosystems of the Middle East and Africa.
Related: Entrepreneur Middle East and Lucidity Insights launch new report on the state of the MENA region’s USD 244 billion healthtech industry
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