Beyond seed funding: why Nigerian digital health startups struggle to grow

Nigeria's growing digital health startup ecosystem has a lot of potential to fill in gaps in healthcare delivery, but many of these businesses fail to get off the ground after getting initial funding. This narrative review examines funding patterns from 2019 to 2025 and investigates why seed-stage investment often fails to translate into scaled impact. Investment reports, case studies of prominent Nigerian health-tech startups, and comparative insights from peer markets were synthesized. The analysis finds that despite a surge of seed funding and a record venture capital peak in 2021, few Nigerian digital health startups convert initial success into sustainable growth. Constraining factors include regulatory hurdles, infrastructural deficiencies, market trust barriers, talent gaps, and systemic health-sector limitations, challenges that mere capital infusion cannot overcome. Case narratives (e.g., Helium Health's regional expansion and 54gene's post-pandemic collapse) illustrate these dynamics. Key mechanisms to bridge the "post-seed" gap are discussed, ranging from strategic public-private partnerships to specialized follow-on funds, with lessons drawn from ecosystems like Kenya and India. Strengthening support beyond seed stages and addressing non-financial frictions will be crucial for Nigerian health-tech innovators to realize their full scale-up potential.

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Publication Details

Journal
Health Economics Review
Published
2025-12-05
DOI
https://doi.org/10.1186/s13561-025-00708-6
Primary Topic
Innovation and Socioeconomic Development
Type
article
Field-Weighted Citation Impact
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article

Beyond seed funding: why Nigerian digital health startups struggle to grow

Ubalaeze Solomon Elechi, Chibuzo Okechukwu Onah, Ironuru Ifeanyi, Mohamed Albert Tarawallie
Health Economics Review
Innovation and Socioeconomic Development
article

Beyond seed funding: why Nigerian digital health startups struggle to grow

Ubalaeze Solomon Elechi, Chibuzo Okechukwu Onah, Ironuru Ifeanyi, Mohamed Albert Tarawallie
article en

Abstract

Nigeria's growing digital health startup ecosystem has a lot of potential to fill in gaps in healthcare delivery, but many of these businesses fail to get off the ground after getting initial funding. This narrative review examines funding patterns from 2019 to 2025 and investigates why seed-stage investment often fails to translate into scaled impact. Investment reports, case studies of prominent Nigerian health-tech startups, and comparative insights from peer markets were synthesized. The analysis finds that despite a surge of seed funding and a record venture capital peak in 2021, few Nigerian digital health startups convert initial success into sustainable growth. Constraining factors include regulatory hurdles, infrastructural deficiencies, market trust barriers, talent gaps, and systemic health-sector limitations, challenges that mere capital infusion cannot overcome. Case narratives (e.g., Helium Health's regional expansion and 54gene's post-pandemic collapse) illustrate these dynamics. Key mechanisms to bridge the "post-seed" gap are discussed, ranging from strategic public-private partnerships to specialized follow-on funds, with lessons drawn from ecosystems like Kenya and India. Strengthening support beyond seed stages and addressing non-financial frictions will be crucial for Nigerian health-tech innovators to realize their full scale-up potential.

Health Economics ReviewVol. 16(1)
University of Nevada, Las Vegas (US), Vilnius Gediminas Technical University (LT), Georgia State University (US), Sierra Leone Urban Research Centre (SL)
Openalex Percentile: Top 37%
Innovation and Socioeconomic Development
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