Ilara Healtha Kenya-based health tech that enables private clinics to access diagnostic devices and pharmaceuticals, has secured $4.2 million in debt capital in a pre-Series A round. The funds will be used to scale of operations in the East African country and to deepen access to healthcare for the masses through the development of a B2B health and labor service that will enable uninsured workers to access care at its network of partner clinics for a fixed monthly fee.
The $2.5 million equity round was led by DOB Equity, with participation from the Philips Foundation and existing investors such as AAIC Investment, Angaza Capital, Black Pearl Investments, Perivoli Innovations. Debt investments came from Alphamundi, Kiva Capital and Boehringer Ingelheim. The new round brings the startup’s total debt, equity and grant funding secured to $11.7 million.
Ilara Health started by leasing diagnostic equipment to clinics in 2019, but has since evolved to allow health centers to acquire pharmaceuticals and other items, such as hospital furniture, on credit. Emilian Popaco-founder and CEO of Ilara, told TechCrunch that this strategic move has enabled private healthcare providers to operate well-equipped clinics capable of providing quality primary healthcare to patients.
“In Kenya, quality of care, not access, is the issue and our aim from launch has been to improve standards of care. These clinics could not provide some services due to a lack of diagnostic equipment or perform minor operations because they did not have furniture. So over time, we became a provider or funder of all the clinic’s needs,” said Popa, who co-founded Ilara with Maximilian Mancini (co-managing director) and Sameer Afzal Farooqi (COO).
Ilara Health taps into the private healthcare sector in Kenya, which has become the preferred alternative for those with medical coverage or those who can afford to pay out of pocket. This is against government facilities that continue to suffer from under-investment. The country’s current leadership hopes to improve its healthcare offering which will be facilitated by a new healthcare funding program that promises to change the way public health care is accessed and delivered. However, it may take time to build enough and well-equipped facilities to meet the growing demand.
Popa said Ilara serves 3,000 clinics across Kenya, out of an estimated 15,000 operating in the country. These clinics are often set up in residential areas, making them easily accessible and a better, but expensive, alternative to public facilities, where occasional equipment failure paralyzes service delivery and immediate care is never guaranteed.
To equip the clinics, the startup has partnered with various manufacturers, including US company Butterfly Network, to provide devices such as the low-cost portable ultrasound tool, which Popa says helps bring scanning services to the target clientele.
The startup also equips clinics with a practice management software based on a monthly subscription (KSh.1000 [$6.25 per today’s exchange rate]), digitize their activities and improve their business management.
“They can see their balance sheet, capture patient data and get a picture of a patient’s journey. They can also be reported to the Ministry of Health at the touch of a button. The software also gives us a view inside the clinic,” he said, adding that they will use the credit rating data to support plans to lend up to $15,000 in working capital.
In Ilara Health’s next phase of growth, they plan to double down on patient outreach through their B2B health and labor service, through which they will partner with employers to give workers access to various outpatient services at partner clinics.
“We live in a place where only 2.7% of Kenyans are privately insured and even the NHIF (government health cover) does not properly cover outpatient care. We created a provider model and now we’re reaching out to patients to complete the circle,” said Popa, who co-founded Ilara Health after working for years in management consulting, then in the tech and startup ecosystem in Africa. Before starting Ilara Health, Popa worked as an investor at DiGamea now fully invested fund focused on Africa and a subsidiary of UK private equity firm Zouk Capital.
