Like fin-tech and edu-tech startups, health-tech startups are attracting investors who eye a huge potential of a $370 billion healthcare market in India by 2022, with returns up to 35-40%.
In 2014-15, the medical technology startups had reported investments of nearly $500 million.
According to investors, increased funding in health-tech startups is a factor of sectoral tailwinds such as increased Internet penetration, rise in digital payments and big-ticket government initiatives. Recently, a majority of health startups have caught investors’ attention and healthcare funding is hitting an all-time high.
Padmaja Ruparel, Co-Founder and President of Indian Angel Network (IAN), a leading seed-stage platform, told BusinessLine that startups are leveraging technology for low-cost devices and health services for a larger number of patients. “The government cannot do everything. Startups are the means to provide healthcare to all.”
In the next five years, she added, healthcare startups are expected to attract investments to the tune of $ 5 billion.
According to Ashish Sharma, MD and CEO at InnoVen Capital India, double-digit returns is an important factor in investors’ rising interest in healthcare startups. Early stage and mature stage startups generally yield anywhere between 20% and 40% returns.
Satish Kannan, Co-Founder and CEO, DocsApp, leading online doctor consultation platform, said penetration of the Internet and increased investments in this sector is fast changing the healthcare scenario in India. “Currently, India lacks six lakh doctors, including 1.50 lakh specialists. In the next 10 years, over two lakh specialists will be needed.”
There is no geographical distance healthcare startups cannot cover, he said, adding young and tech-savvy Indian population is driving this growth. “DocsApp has been approached by 70 lakh patients so far. We handle around two lakh patients a month.”
DocsApp raised Rs 12 crore in debt capital from InnoVen Capital. Sequoia led a $ 35 million fund round in Biofourmis, which has a digital therapeutics platform, BiovitalsTM, based on emerging clinical evidence that drug-software combinations can enhance clinical effectiveness.
Another Gurgaon-based healthcare startup, CapBuild Clinical Skills, raised an undisclosed amount from HealthStart India. Pristyn Care has raised Series A fund of $ 4 million from Sequoia India.
A recent EY report claimed that 82% of healthcare startups are offering improved affordability of their products.