What African Healthtech Innovators Need to Know About Valuation in 2026
As the funding environment contracts, valuations have followed. Investors warn that multiples for African healthcare businesses have compressed in the last 5 years: where EBITDA multiples for African healthcare businesses reached 12-16x, today 6-10x is more common. In this environment, how should founders be thinking about valuation?
To unpack the challenge, in April i3 convened a valuation learning session with 20 leading healthtech executives and 3 experts: Rajal Upadhyaya (30+ years advising, investing in, and operating businesses across Africa; founding investor and former board member at GoodLife Pharmacy), Zakir Mohammed (Legal Counsel at Impact Fund Denmark, Denmark's development finance institution), and Amaan Khalfan (i3 deal expert, former CEO of GoodLife Pharmacy). 5 key takeaways emerged:
1. Capital has shifted from growth-at-all-costs to value generation
This is one of the hardest times to raise capital. Investor appetite has moved from growth-at-all-costs venture models toward businesses with solid fundamentals, quality revenue, and strong governance. Investors now want evidence of all three. Thenotion of patient, concessional DFI capital is receding. DFIs have shifted toward commercial targets with return obligations to investors beyond the state. Strategic investors remain active in healthcare but are disciplined and longer-term. For founders, the implication is that while growth still matters, growth without evidence of value creation carries less weight now.
2. Quality of earnings beats top-line growth
For growth-stage companies, investors scrutinize customer concentration, the share of recurring versus one-off revenue, the split between government and private sector buyers, and defensibility against better-funded entrants. For pre-profit companies, the conversation moves to the path to profitability. A 12-to-18-month path is credible. A 36-to-48-month path raises the question of who funds the gap and how existing investors get diluted.
3. Trust is the most valuable asset to build
Fundraising is a partnership, and trust is the foundation. That trust is built through repeated, consistent communication over time. Tell an investor what you will achieve in 6 months. Come back and report what you did, what you missed, and why. One company closed a round with an investor who first issued a term sheet 2.5 years earlier. They politely declined, kept the investor updated, and came back when the timing was right. The deal moved fast because trust was already in place. Investor alignment matters too. The cheapest capital could become the most expensive if the investor is misaligned on vision, pace, or control. Ask the hard questions before signing. What value will this investor add in tough times? How do they align with your strategy? Investors respect founders who engage with clarity on these points. It signals confidence in what you are building.
4. Good governance is critical to reinforcing a sense of trust – it’s not just a checkbox
Weak governance is one of the most common reasons deals fall apart. Investors look for a nimble but expert board, clean cap tables, financial discipline that ties capital to its intended use, and reporting infrastructure that can absorb institutional investor requirements.
5. Your impact pitch and your commercial pitch should be the same pitch
A common question founders face is whether to lead with impact or commercials when speaking to investors. The answer from the session was clear: they should not be separate conversations. A commercially sustainable business reaching the last mile in African healthcare will produce impact inherently. Splitting them into two framings signals to investors that the business model does not stand on its own. Founders who walk into a room with one integrated story, where the commercial engine drives the impact outcome, are better positioned to attract and retain institutional capital.
