E Squared Investments, a South African impact investor, has made a milestone investment in Alignd, a women-led healthtech aiming to overhaul the country’s notoriously inefficient private healthcare system. The undisclosed sum will fuel Alignd’s expansion from palliative care into the equally costly maternity and kidney disease sectors.
Alignd is betting against the dominant “fee-for-service” model, where providers are paid for the volume of procedures they perform, a system often criticised for driving up costs without guaranteeing better health. Instead, it champions a “value-based” approach, which realigns financial incentives around patient outcomes and well-being.
It’s a model that’s gaining traction. Since its launch, Alignd has inked partnerships with major medical schemes like GEMS, Fedhealth, and Bonitas, giving 2.9 million beneficiaries access to its services.
The Problem with Paying per Procedure
In South Africa’s private healthcare market, the fee-for-service model has led to spiralling costs, particularly in complex areas like end-of-life care, which Alignd estimates costs medical schemes over R20bn annually. This system can create incentives for over-medicalisation, leading to unnecessary and expensive hospital admissions that don’t always align with a patient’s best interests.
Alignd’s counter-proposal is simple: pay for results. By focusing initially on palliative care, the company built a network of over 300 providers focused on delivering home-based, person-centred support.
The results appear to be bearing out the model’s viability. The company reports that its approach has reduced non-beneficial interventions like chemotherapy in the final month of life by a third. Crucially, it claims that two-thirds of its patients pass away at home or in hospice rather than in a hospital, and that 90% of families would recommend its service. For medical aid funders, this means significant cost savings; for families, it means less financial and emotional strain.
New Capital for New Verticals
With the fresh capital from E Squared, Alignd is setting its sights on two new high-cost, high-need areas: maternity care and kidney disease. The goal is to apply the same value-based principles to improve patient outcomes and bend the cost curve in sectors ripe for disruption.
The investment also strengthens Alignd’s leadership team. Sharon Dlomo, an Allan Gray Fellow and former investment professional at Alignd’s first institutional backer, 3 Capital Ventures, is joining to lead its strategic finance function.
“Alignd seeks out ‘win-win-win’ solutions by holding the needs of providers and funders alongside the voices of patients,” said Dlomo. “What drew me in was this ability to hold tension in service of building sustainable healthcare systems.”
For E Squared, the investment aligns with its mandate to back purpose-driven companies. “Alignd exemplifies what it means to create economic value and social impact in equal measure,” said Tshilidzi Matlala, Chief Portfolio Officer at E Squared.
The deal, announced during South Africa’s Women’s Month, is being positioned by the investor as part of a long-term strategy. “Supporting women-led businesses is not merely a Women’s Month gesture for us — it is a deliberate, long-term investment strategy rooted in equity and inclusion,” Matlala added.
While its immediate focus remains on South Africa, Alignd believes its model has global relevance, particularly in other emerging markets grappling with fragmented systems and the high cost of care.