They said that software will “eat” the world but I will add that before that can happen, hardware will “cook” the world. The news that Nigeria’s Reliance has raised $40 million could come as a surprise to many, but for those in the health tech domain, it is expected.
Here is the deal: the health sector offers many promises in Africa. But capturing that value cannot just happen by delivering new digital technologies. In other words, digital tech has severe limitations if they do not have platforms to operate in the health sector.
Those platforms are many and the most important among them is health insurance. The fact is this: it is very hard to make money from someone who does not have money. The reason why healthtech is doing well in the advanced economies is because insurance makes it possible to pay the innovators pioneering new domains. Africa, unfortunately, has not been lucky in that space.
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So, if you want to win this market with technology, you need to think how you can make it easier for people to afford whatever you bring. Reliance is addressing these two concerns with new technologies and a novel insurance model. Combining both, it reduces costs via technology-anchored productivity, while making it easier for people to afford whatever it is offering via health insurance plans.
Having raised $40 million, I think that it should be one of the most valued health insurance ecosystem players in Nigeria since you will expect the valuation to be north of $100 million and few insurance companies in Nigeria are in that league.
Reliance Health operates business-to-business and business-to-customers models. Reliance HMO is the company’s health insurance plan for both sets of customers where individuals can select monthly, quarterly or yearly health plans ranging from ?3,500 (~$7.00) to ?148,500 (~$297.00). On the other hand, businesses can make subscriptions on behalf of their employees, which Kuti said are slightly cheaper than plans used by retail customers.
Over 200,000 individuals in total from both models use Reliance Health. But the platform has seen the most stickiness with its business customers. The platform serves 600 of them, including Biersdorf Nivea, Jumia and PwC, while maintaining an attributable intention rate of 99%, said Kuti.
This is a pure double play strategy and the company has captured value by powering its digital solutions with affordable health insurance plans: “Double play posits that firms mix market positioning of products to maximize strategic competitiveness: A company could be delivering service in one sector while capturing value in another. And most times, what is helping the firm to thrive goes beyond what many people associate with it.”
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We have high hopes for Reliance HMO, as they’ve proven to be very reliable and dependable to both enrollees and healthcare providers. Love their hybrid model of B to B, and B to C too! That’s a lot of skin in the game.