Funds raised by health technology startups in India is at all time high in this year of 2018 with $510 million Venture Capital investments made across 80 health-tech startups in the country so far, reported Livemint on the basis on data by Tracxn Technologies, a data analytics firm that tracks startups.
The top three health-tech startup fundings this year were of — PharmEasy, Curefit and Netmeds. PharmEasy, which is an online pharmacy, raised $115 million across three rounds this year, while fitness app Curefit raised $100 million from IDG Ventures, and online pharmacy Netmeds secured a $35 million round led by Cambodian investor DPC Group.
Rise in health-tech startup fundings have witnessed a steady growth since 2016. The Tracxn data suggests that in 2017 investment in health-tech startups recorded $343 million from $163 million in 2016 however it also to be noted that since 2016, this period also witnessed a fall in number of funding rounds i.e. — from 135 in 2016 and 130 in 2017 to 80 in 2018 so far.
It may also be recalled that according to a report published by NASSCOM in November 2017, funding in health-tech segment has witnessed 129% increase in funding from $70 million in FY’17 to $160 million in FY’18, which attributes to the increased traction in these segments to innovation.
In latest 2018 Startup report by NASSCOM, HealthTech along with Enterprise Software and FinTech, is top-3 leading verticals, which comprise 50% of total Startups in India.
Health-tech is broadly defined as use of technologies, such as analytics, internet of things (IoT), mobile and wearable devices, among others, to improve delivery of healthcare services.
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.
Demonetisation and the subsequent surge in digital payments also helped health-tech startups, said Anil Joshi, managing partner, Unicorn India Ventures, an early-stage venture capital firm. “While investors say healthcare is a core sector, creating money-making business models and making customers pay is often the issue. The push towards digital payments somewhat helped overcome this hurdle and improved market access.”
Health-tech startups, especially online medicine delivery platforms, are focusing on customers with chronic ailments, enabling repeat orders, which resulted in increased business, added Joshi.
Unicorn India Ventures has invested about $2.5 million across two health-tech startups, including NeuroEquilibirum, which develops diagnostics for vertigo, and Pharmarack, which provides automated order processing and management for pharmaceutical retailers and distributors.
In May this year, India had urged the Asian Development Bank (ADB) to invest in health-tech and fintech startups in the country to help improve the quality of life in Asia while sharpening focus on infrastructure lending by ensuring loan disbursals within a year of request.
Healthcare schemes, such as Ayushman Bharat, have also put the spotlight on healthcare, leading to positive sentiments even among startups, said Amit Varma, managing partner, Quadria Capital, a healthcare-focused private equity fund. “Start-ups are trying to solve the key issue of last-mile connectivity. No one wants to go 400 km for better healthcare. And in this, technology is the differentiator.”