Providers of home-healthcare services are seeing increased interest from venture capitalists due to a rise in chronic illness, coupled with hospitals’ inability to deal with the rising volumes.

Medwell Ventures, which runs Nightingales home-healthcare services in India, received a $21-million Series B fund infusion, led by Mahindra Partners, along with existing investors Eight Roads Ventures and US-based F-Prime Capital Partners. The founders, including Vishal Bali, former Group CEO of Fortis Healthcare, and other early angel investors also participated in the funding round.

The business rationale for the fund-raising include further expansion into Tier I and II towns, expanding range of services and hiring additional manpower. It plans to add six branches in Mumbai, and expand its network in Bengaluru, Hyderabad and Pune and other metros.

Other ventures in the home-healthcare space are also drawing investor attention. A few days back, Healthcare atHome (HCAH), a company backed by the Burman family (promoters of Dabur), raised a funding of $40 million from Quadria Capital, a healthcare-focussed PE firm which manages around $1.5 billion in capital. According to Vivek Srivastava, co-founder and CEO, HCAH, the funding will help in aggressive expansion across 25 cities and strengthening some of its medical services.

These companies are vying for the healthcare-related services market in India, which is touted to reach $8.4 billion by 2020.

While numbers are one part of the story, a larger one is around the inability of healthcare providers to cater to the rising cases of chronic illness. According to data from the Directorate General of Health Services and the Central Bureau for Health Intelligence, every government hospital serves an estimated 61,000 people in India, with one bed for every 1833 people.

“The country can no longer look just at primary and secondary care if it has to tackle the healthcare issue seriously,” according to Bali. His reasoning points to the lack of availability of beds, coupled with hospitals not having enough manpower to treat chronic illness. This has led to the middle class increasingly looking at home healthcare as a way to take care of their beloved ones due to increasingly hectic lifestyles.

Amit Varma, co-founder and Managing Partner, Quadria Capital, said that globally, the home-healthcare segment is attracting interest from key stakeholders, given its ability to deliver convenient and cost-effective care. Industry watchers peg home-healthcare services to be around 40 per cent cheaper than going to a hospital.


However, home-healthcare services does not fall under the insurance ambit, which could put brakes on their growth. Bali agrees, but says Medwell is in talks with two insurance companies to cover home-healthcare services.