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Sub-Saharan Africa, with a growing population and middle class, offers vast potential for private healthcare providers. But unlocking that potential can be challenging. No one knows this better than Max Coppoolse, a Dutch business executive who worked for Unilever, Philips, and Vodafone before he co-founded the Investment Fund for Health in Africa (IFHA) in 2007. This private equity fund specializes in investment in small- and medium-sized healthcare enterprises. It has learned from experience that the key to investing in health in Africa and making profitable exits is a relentless focus on quality plus a keen eye for opportunities to promote scale.

“In principle healthcare is not such a difficult business, if you pick out the right investments, because the health sector is always growing faster than GDP by about two or three percent on average.” — Max Coppoolse

Coppoolse came to private equity in the health sector late in his career. He grew up frequently traveling to Africa and knew that he eventually wanted to work there longer term. After a career in international business in Asia, he encountered a healthcare foundation in Africa, and thought about how to promote more investment in health. He decided that an active private equity model could be more sustainable than donor funded operations.

“With private healthcare in Africa, entrepreneurs there tend to think about their own system and setup. When we come along, we try to institutionalize their businesses in areas such as proper financial reporting and more transparency, which makes the business more independent from the family or individuals. This also makes the business more trustworthy in the eyes of the outside world, which can lead to new business opportunities,” said Coppoolse.

IFC became an investor in IFHA in 2010 and has contributed $29 million to its funds. IFC liked IFHA’s hands-on approach of directly managing investee companies, instead of outsourcing the job, as well as its focus on creating integrated healthcare platforms that can better address key issues of quality and affordability of healthcare.


“Health providers, which account for much of the delivery in Africa, tend to be individual doctors and entrepreneurs. This creates a lot of fragmentation in the industry, leading to inconsistent quality of care, inefficiency, and often lack of business continuity. This also limits the ability of the government and insurance players to engage with private sector providers,” said Elena Sterlin, Head of Health and Education Sectors at IFC.

An initial funding round was completed in 2008, followed by a second fund in 2016. “During the first round, I learned how difficult it can be to scale up in Africa. If you don’t have scale, that limits your exit possibilities. That’s why with the second fund we made it a central philosophy to use platform companies—companies that we use as a base to expand from,” Coppoolse said.

One such company is CarePay, a digital platform for sending, receiving, and paying funds and data for healthcare. IFHA started investing in CarePay in 2015. Since then revenues have grown six-fold and more than one million Kenyans have registered on the platform. CarePay has recently been expanding to Nigeria and Tanzania. “By enabling people to use their mobile phone to pay for treatment in specific clinics and hospitals, you reduce the costs of administering their benefits package by 90–95 percent. That lets you create a whole new market: the lower-middle class,” he said.

Another IFHA investee company doing well is Africa Air Rescue (AAR), which provides air rescue and ambulance services, has a health insurance arm, and runs primary care clinics and a specialty hospital. Between 2010 and 2017, AAR expanded from 21 to 40 clinics and from 685 to 1,557 employees. “Until now, there has been no hospital group from sub-Saharan Africa, excluding South Africa, that has built up a presence in more than two or three countries. We aim to do this with AAR, which already is in Kenya, Tanzania, and Uganda,” he said.

Overall, the future for private healthcare in Africa looks bright, according to Coppoolse. “In a lot of countries in Africa, the middle-income segment is growing quite fast, so their availability and willingness to pay for healthcare as private individuals is increasing,” he said. The key to commercial success, he firmly believes, is quality: “Once a company achieves professional quality, almost every Western supplier will want to use it, because it’s very difficult to find trustworthy suppliers and distributors in Africa.”

IFHA’s investments show growing development impact. CarePay has forged partnerships with commercial enterprises and development organizations that have resulted in 152,000 treatments for Kenyans, delivery of 1,365 babies, diagnosis of over 9,000 malaria cases, and care for over 3,500 HIV/AIDS patients. “Development impact is the consequence of what we do. But we want to do it in such a way as to get good financial returns. Otherwise, you might be out of business after your first fund ends,” says Coppoolse. “The key to getting this is combining of scale and quality. That’s the winning formula.”

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Published in November 2018