Despite a surge of digital health innovations and AI-driven startups across emerging markets, many promising solutions stall before they reach meaningful scale. The problem isn’t a lack of innovation; it’s that scaling requires investors to become ecosystem builders, not just funders, to help startups achieve their potential impact.
Across emerging markets, innovation thrives in the health sector. Analysts size the digital health market at nearly $300 billion, and startups deploy artificial intelligence daily to detect diseases, digitize supply chains, and design new models for last-mile care. Yet while innovation surges, scale remains elusive. Too many promising solutions stall between early traction and sustained impact.
So, what does it really take to move from promise to scale in health innovation? We posed this question to a panel of experts hosted by the Investors for Health network — a group of 22 investors including DFIs, private equity and venture funds, impact investors and corporates, all working to build inclusive health systems in emerging markets. A consensus emerged that we must address three key issues: What makes a startup investable in emerging markets? What drives business models that deliver both impact and viability? And why isn’t capital enough on its own?
What makes a startup investable in emerging markets?
In emerging markets, where health needs are pressing and commercial success often depends on reaching underserved populations, investors are increasingly adopting a dual approach that considers both financial performance and development impact.
For investors, this means moving beyond growth curves to interrogate whether revenue scales with impact, whether costs are recoverable in low-resource settings, and whether pricing aligns with payer realities. These questions distinguish the models positioned for scalable and sustainable impact.
“IFC’s investments must deliver on development impact while also being commercially viable,” says the IFC’s Monique Mrazek. “We don’t do anything that isn’t commercial and isn’t sustainable. We need to make sure we are reaching underserved patients in our target geographies. Therefore, both impact and commercial criteria are really important to us.”
Investment readiness isn’t static — it evolves with the company itself. According to Prashant Warier of Qure.ai, “In the early stages, investment isn’t based on commercial traction, but on having a great team, a great product, and early success deploying it.” At that stage, investor confidence is driven by the credibility of the team and the potential of innovation.
For example, Qure.ai had developed a breakthrough AI diagnostic solution. In early stages, it received peer-reviewed recognition in a leading medical journal and support from international health agencies. At later stages, however, investors focus on commercial success, regulatory approvals and having a plan for further scale. By the time of its third institutional round, the company had received multiple FDA clearances, expanded access to over 1,000 sites, and significantly grown its revenue.
This example reflects a broader pattern in the investment landscape: investor criteria change as ventures grow, underscoring the importance of assembling the right team early, staying responsive to shifting demands, and proving the fundamentals at every stage.
What drives business models that deliver both impact and viability?
Fewer than one in three startups turn a profit, and those that succeed share three traits: they address real needs; they are grounded in local market realities; and they remain flexible as they grow.
According to ‘Dunni Lawal of Salient Advisory and Investing in Innovation Africa, “a successful business model starts by solving real gaps in the system — whether it’s improving access, product distribution, or care delivery. The most successful models are blended and flexible, combining multiple pathways to scale and diversify their revenue.” This flexibility is particularly critical in emerging markets, where shifts in policy or funding and system fragmentation are common.
Resilience and adaptability are key for founders in both emerging and developed markets, says Guillermo Pepe of Mamotest. “From the beginning, we struggled to make our model sustainable,” he says. “We launched our AI diagnostics solution in Argentina, but we couldn’t break even. Then, we saw an opportunity to solve another problem in Spain with a shortage of diagnostic professionals.” This flexibility helped stabilize the company’s finances amid economic uncertainty in its home region, while allowing it to remain focused on its original mission.
Why isn’t capital enough on its own?
Scaling a health innovation takes more than capital; it requires investors to help build credibility, reduce risk, and strengthen the operational foundations ventures need to grow. Many startups face systemic barriers that stall progress, including fragmented sales channels that limit economies of scale, complex and evolving regulatory landscapes, and high-risk markets where affordable capital is scarce, particularly for ventures targeting low-margin segments.
Even well-designed innovations can struggle to gain traction, delay critical milestones, or fail to scale altogether. One way investors can help bridge this gap is through matchmaking between startups and institutional buyers or public-sector partners, creating the validation needed to gain traction. This kind of support can also help startups access more affordable capital through approaches like blended finance, which combines concessional and commercial funding to make early-stage ventures more viable.
On the operational side, support with regulatory approvals, procurement processes, or executive hiring is often make-or-break for startups. As Mrazek put it, “Understanding the status of the regulatory environment is really critical, especially if the regulatory environment is still grey or not yet defined.”
For startups, investor support can be transformational, particularly when it helps unlock markets and overcome operational hurdles. Investor relationships enable founders to break through major barriers, from securing large buyers, broadening market reach, and ensuring regulatory compliance.
“One of our investors helped us secure multiple commercial contracts by introducing us to clinics and health providers. Well-connected investors can give you real access to customers,” says Warier. Beyond access, investors also offer critical behind-the-scenes advice, sharing benchmarks, talent strategies, and operational lessons drawn from across their portfolios. An engaged partnership can be just as valuable as funding itself.
From funders to ecosystem builders
Realizing potential requires more than just funding the next innovation. It demands a reimagining of investors’ roles not only as capital providers, but as strategic enablers of scale. The future of health innovation in emerging markets depends on investors willing to act as ecosystem builders — bridging systems, unlocking access, and championing the conditions for long-term, inclusive impact.
We are grateful to the members of the Investors for Health network for sharing their thoughts on the way forward: First, investment criteria must be calibrated to a venture’s stage of growth and the realities of the markets it is aiming to serve. Second, successful businesses are adaptive, blended, and built to evolve. And third, investors must play a stronger role and act as conveners, connectors, and champions within the ecosystem. These principles are what turn good ideas into lasting impact.
Bianca Samson is an associate partner at Dalberg. Bernardo Cantu is the global health and nutrition practice area manager at Dalberg. Dalberg manages the Investors for Health network.
