Medsaf, a once-prominent healthtech startup in Nigeria’s pharmaceutical sector, officially ceased operations in early 2024 after years of attempting to digitise the country’s fragmented drug supply chain. Founded in 2016 by Vivian Nwakah, the company raised over $7 million from local and global investors, including Techstars, and had worked with more than 1,000 hospitals and clinics across the country. Despite its ambitious mission and initial success, the startup’s quiet exit marks a sobering moment for healthtech innovation in Africa.
From Trailblazer to Troubled Waters
Medsaf aimed to revolutionise pharmaceutical procurement by offering hospitals and pharmacies a platform to source safe and quality-assured medication directly from verified suppliers. Its launch was seen as a critical step toward combating Nigeria’s counterfeit drug crisis, where an estimated 10% of medicines are substandard. The company gained significant traction during the COVID-19 pandemic, reportedly achieving 200% growth as healthcare providers increasingly turned to digital procurement solutions.
Financial Struggles and Unpaid Dues
By January 2023, Medsaf had run out of funds following an unsuccessful Series A fundraising round, with internal documents attributing the shortfall to unpaid invoices, the loss of a key government contract, and broader macroeconomic pressures. CEO Vivian Nwakah revealed in investor communications that a failed acquisition attempt in November 2023 sealed the company’s fate. Concurrently, employee complaints surfaced regarding unpaid salaries, unremitted pension contributions, and operational layoffs, highlighting the financial distress that plagued the company throughout 2023.
The Impact of a Challenging Economic Environment
The startup's collapse coincided with a broader downturn in Nigeria’s economy, including significant foreign exchange volatility and political instability that dented investor and lender confidence. Medsaf was scaling to meet larger institutional demands when these shocks hit, derailing its ability to continue operations. Nwakah attributed the inability to recover to a combination of internal missteps and external economic forces that became increasingly difficult to manage.
Leadership Reflections and Lessons Learned
In her final communications with stakeholders, Nwakah expressed both pride and regret, acknowledging mistakes in early team formation as a critical weakness. She described the experience as transformative but also personally taxing, citing burnout and professional betrayals. Despite these challenges, she maintained that Medsaf had laid important groundwork in demonstrating the viability of digital drug procurement in Nigeria.
A Sector Still Moving Forward
While Medsaf has exited the scene, Nigeria’s healthtech sector continues to see strong momentum from newer players building on its early efforts. Startups such as Remedial Health, Field Intelligence, and Lifestores Healthcare are rapidly expanding their services, digitising procurement and inventory management for thousands of pharmacies and clinics. Backed by increased funding and improved infrastructure, these companies are filling the gap left by Medsaf’s closure and pushing forward with sector-wide transformation.
Winding Down with Uncertainty
Medsaf’s U.S. entity is currently undergoing formal dissolution, while its Nigerian operations remain dormant and difficult to fully close under existing legal frameworks. A small team continues to volunteer efforts to liquidate remaining inventory and collect outstanding hospital receivables, though hopes for full repayment to investors and employees appear slim. The company’s final days were marked by appeals to stakeholders to delay public announcements in order to preserve the chances of recovering debts.
Medsaf’s shutdown serves as a poignant case study in the challenges of healthtech entrepreneurship in emerging markets. It underscores the vulnerability of first movers navigating regulatory uncertainty, economic volatility, and operational fragility. Though its operations have ceased, the legacy of Medsaf’s early efforts continues to influence the evolution of Nigeria’s pharmaceutical supply chain and offers lasting lessons for the ecosystem it helped shape.