African health services focus on sight and sound

The two companies ranked by the FT/Statista this year, South Africa’s HearX Group (ranked 10) and Ivory Coast’s Lapaire (14), deal with the most important needs: hearing and seeing.

Several of the top companies are broadly classified as health-related, an area that has received a lot of attention since the Covid-19 pandemic exposed Africa’s dependence on foreign suppliers. especially the vaccine.

The founders of HearX and Lapaire came to the conclusion that there were basic unmet needs. HearX chief executive Nic Klopper, one of the four original founders, says the initial impetus came after discovering how many people were excluded from hearing tests and assistive devices. hearing. “The idea was to democratize access,” he says.

The first insight of Jérôme Lapaire, a Swiss lawyer based in Nairobi, and founder of the eponymous company, came after realizing that only people in fancy restaurants or airports were they seem to be wearing glasses. He wondered why he hadn’t seen supermarkets, street vendors or Uber drivers carrying binoculars. Not, of course, because their eyes were better, but because they could not afford the equipment to correct their vision.

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Of the two companies, HearX took a new scientific approach, using AI technology from Pretoria University, starting with the hearing test itself. These are usually done by doctors and otolaryngologists who use an audiometer, which costs upwards of $20,000, to measure hearing. The HearX innovation was to put the functions of an audiometer on a smartphone.

However the hearing test market has proven difficult to crack and today accounts for only 5 percent of HearX’s revenue.

The real breakthrough came when the company created hearing aids available overseas, taking advantage of a 2022 US law change that allows patients with mild to moderate hearing loss to access resources without visiting a specialist. Connected to a smartphone via bluetooth, the user switches on the hearing aids, which look like earpods, using an app. Real-time consultations can be conducted with HearX consultants – mainly based in South Africa – who repair the devices remotely using customer data stored in the cloud.

HearX aids sell for $999 a pair, about a fifth of the cost of a hearing aid, says Klopper. Although the market is still nascent, HearX has sales of around $58mn by 2023. Now in its sixth round of funding, the South African company has raised around $60mn, taking $200mn or more.

Regulators in HearX’s home market of South Africa have been slow to approve the sale of the technology, which is targeting audiologists, a powerful group of representatives. The company hopes that regulators in other markets, including the UK and other developing countries, will allow it to expand there.

It has created a pilot in Kenya and eventually hopes to introduce affordable devices in Africa, including those that can be paid for in small monthly installments. Klopper estimates that only 2 percent of hearing-impaired Africans have access to hearing aids.

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A business model to watch what Lapaire introduced did not involve new technology and was easy to make a mistake. He started by buying 30 pairs of cheap glasses online and visiting companies that provide eye exams for employees. For many, it was the first eye exam they ever had. His glasses, which at the time cost $25 a pair, were four out of five times cheaper than those available at optometrists catering to upper-class Kenyans.

He branched out into retail and opened a store in Westlands, an affluent suburb of Nairobi that he hoped would lend to his business acumen. At this time, he was thinking about where to get his frames and lenses – from factories in China, and eventually in Tunisia and Japan.

But there were problems. Spending was in dollars while income was in the depreciating local currency. Few potential buyers had insurance. Customers had to pay out of pocket for something that took weeks to arrive while the lenses were fitted. Lapaire received threatening calls from competitors unhappy with the price competition. Advertising costs to acquire customers from popular brands were high.

The biggest obstacle was unexpected. Kenyans thought his glasses – at $35 for a standard pair and up to $50 for special lenses – were too cheap. “People were looking for something more important that they would like to have,” he says. The store was closed.

Fortunately, Lapaire was already focusing the company’s attention on west Africa where, he says, “the UK Specsavers approach” was more accepted. Now headquartered in Abidjan, the commercial capital of Ivory Coast, it has 70 stores in six countries, including Burkina Faso, Mali, Benin, Togo and Uganda. Customers can buy online, but only with a prescription.

Lapaire’s Glasses is still small — each shop turns three to five glasses a day — but it’s been expanding. This year it raised $3mn in a round led by impact investment fund Investisseurs & Partenaires.

Lapaire says his business can grow even when personal income growth is sluggish. He says: “It’s actually about the citizens.” “We’re looking at the underdog and we’re serving a need.” If people can, he says, they’ll pay $35 to improve their vision, sometimes life-changing.

He adds: “For us, it’s like playing a big market. “We know that the population is growing like crazy. We know that people will have less money to spend, and we want to capture this. ”