ESTABLISHMENT

Ilara health is a Kenyan based tech startup aimed at lowering the cost of diagnostics in Africa. Ilara was founded in 2019 by Chief Executive Officer Emilian Popa and Chief Operations Officer Sameer Farooqi.

In many rural areas of Africa, the availability of standard diagnostics is very poor. Primary care doctors cannot offer many diagnostics in their clinics, so must refer patients. Given the infrastructure challenges in Africa, most patients often do not go to the referred centres. Therefore, about 500 million people in mid and low-income countries

Ilara Health works to brings accurate and affordable diagnostics to Africans. It is a company based in Nairobi that distributes low-cost, AI-powered diagnostic devices directly to primary care doctors in peri-urban and rural clinics. The equipment reaches doctors who need them, supporting the rapid adoption of innovative technologies such as portable ultrasound and blood diagnostics for diabetes.

The new investment saw the participation of Shaka VC, a Chinese venture capital firm based in Nairobi, Chandaria Capital – Chandaria Industries’ VC arm, and Villgro Kenya.

FUNDING

Ilara health has had two funding rounds with the total number of funds amounting to $ 1.8M. Their latest funding was raised on Oct 20, 2020, from a Grant round.

Ilara health secured a $1.1 million funding from the Bill and Melinda Gates Foundation to improve maternal health outcomes. Awarded in September, the grant will reach approximately 4,000 low-income pregnant women in peri-urban Kisumu county. It will address a significant drop in antenatal care (ANC) attendance at larger health facilities as concerns for possible COVID-19 transmission grow in these hotspots.

The grant will be used to develop effective ANC interventions and tech-based solutions for pregnant women unable to access essential services during the COVID-19 pandemic. Ilara Health, in collaboration with the Kisumu Ministry of Health and the Kenya Medical Research Institute, will leverage a network of local primary care facilities, telemedicine, and home-based health worker consultations to ensure safe continuity of life-saving maternal care during the pandemic and beyond.

It also raised $735,000 from ShakaVC, Chandaria Capital, Villgro Kenya, and a group of angel investors.

MODE OF OPERATION

Ilara Health secures seed funding for pay-as-you-go AI-powered diagnostic devices. It then distributes the devices directly to primary care doctors in peri-urban and rural clinics. The equipment reaches doctors who need them making medical services such as portable ultrasound and blood diagnostics for diabetes much easier to perform.

Though Ilara’s devices cost a fraction of legacy diagnostic equipment, their price tags are still too high for informal clinics to purchase outright. To make its equipment more affordable, Ilara introduced an innovative financing option: its clients pay a small upfront deposit and the balance is settled over 24 months. Ilara’s devices are connected to a technology platform that allows the company to turn them off remotely if a client doesn’t pay. About 70% of the clinics pay by mobile money platforms like MPESA, while the rest do it through cheques or bank transfers.

Ilara health identifies companies making miniature models of expensive medical devices such as a haemogram machine which costs about $7,000 (725,935 KES). The startup then gets these devices and integrates them into its proprietary technology platform. The integrated devices are then leased as a bundle to small clinics, serving as a revenue source. For the leasing model, the clinics can choose to go for the subscription or pay-per-test option.

On the other hand, they can also choose to own the devices with payment spread across 24 months. All these models make up multiple revenue sources for Ilara Health while also providing the clinics with revenue-making assets.

IMPACT ON SOCIETY

Greater availability of diagnostic equipment has health benefits and enables clinics and pharmacies to boost their revenue by offering additional services to patients.

The devices Ilara currently has in the market can diagnose infections as well as non-communicable diseases such as diabetes and hypertension.

The company also provides a route to market new tech-powered diagnostics and medical equipment by partnering with companies using robotics and AI to create lower-cost diagnostics, integrating their devices into their tech platform, and selling this bundle to doctors with financing.

OBSTACLES

One challenge is operating in areas where healthcare services are informal and disorganized.

Ilara also has to provide extensive training to its clients on how to operate the devices. On top of that, many of these clinics often face cash flow constraints which affect their ability to pay.

Additionally, the cost of traditional diagnostic machines can run into tens of thousands of dollars, which is too expensive for Ilara’s customers. As informal businesses, these clinics and pharmacies do not enjoy the benefit of traditional financial services typically used by SMEs to support their growth.

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