Healthcare


India, with a population of 1.2 billion people, is the second most populous country in the world.


In spite of producing around a record  50,000 M.B.B.S doctors per year, one of the highest number of nurses and trained professionals along with FDA approved devices & medicines, India still has a long way to go.


With a doctor-patient ratio of 1:1700 , against the WHO minimum requirement of 1 for every 1000, disruption is the only way to go ahead.


This sector is predominantly privatized with government playing a key role only in the education of doctors. Almost 75 to 80 percent of hospitals currently in the country are managed by the private sector.


Types of Healthcare Startups


The disruptions will come from startups in all aspects of healthcare.


a) Healthcare services: There is a need for an additional 600,000 to 700,000 beds in India over the next five to six years.


b) Diagnostics Services : The rise of chains such as Lal Pathlabs, Thyrocare is largely due to the availability of Venture Capital Money in the country.

c) Diagnostics Products: Low-cost point-of-care devices are being built to bring health-care solutions to the patients.


d) Medical Devices: Not limited to monitoring & evaluation of a patient’s health, latest medical devices are making healthcare more objective and accurate.


e) Medical Technology: Information Technology in the form of Hospital Information System (HIS) and other Digital Record keeping systems makes documentation of a lot of existing data possible.


f) E-Health Services: Telemedicine or Tele-Health is the way to go ahead in a nation where only 30% population lives in the cities, however, 70% of the healthcare services are concentrated in the cities. e-Health services help us to reach the last mile.


Healthcare Investments Trends


From 2000-2015, a total of $3.21 billion Foreign Direct Investment (FDI) has been received by Hospitals & Diagnostic Centres (as per Department of Industry Policy and Promotion – DIPP).


According to Indian Brand Equity Foundation (IBEF), the healthcare market in India is expected to touch $280 billion by the end of this decade, clocking a CAGR of 22.9 percent from $100 billion.
The healthcare delivery sub-segment accounts for 65% of the whole market. From 22 deals worth $91 million, healthcare has seen an increase to 57 deals worth $267 million dollars. Analyzing the data of the Top 20 investments made in since now, there is a clear inclination towards preventive care & startups that increase the convenience of care.


MedTech Investors Classification
The amount of MedTech investments depends on the stage the MedTech investor is investing in the startup. There are various funds that invest in MedTech with varying focus groups and at different stages such as seed round, angel round, series rounds (A, B, C etc).


1 Sequoia Capital: Sequoia’s claims that they have 16 Healthcare investments, some of which include the likes of CloudNine Hospitals & Vasan EyeCare. It’s worth noting that they count the likes of Practo & 1mg as one of their investments in the  technology sector, rather than healthcare.


Overall, Sequoia Capital has invested in 34 healthcare & health-tech companies. In 2015, of the top 5 MedTech investments, Sequoia was a part of 4 of them, investing twice in Series B & Series C in Practo.


2 Matrix Partners: With 8 portfolio companies, Matrix Partners is one of the important MedTech investors in the Healthcare Space. Matrix seems to have an eye at Unit specialty centre as it has invested in ophthalmology chain like – Centre for Sight, Orthopedic company Mewar Orthopedic, Maternity & Childcare company CloudNine Hospitalls.
Matrix also co-invested in both the Series B & Series C rounds of Practo in 2015 along with Sequoia Capital.


3 Accel Partners: This Venture Capital claims to be the first partner to the most innovate technology entrepreneurs globally. Accel has invested in 15 healthcare companies including some front runners in the space of home-care such as Portea Medical of which it was involved in the Series A as well as Series B.


A few of these Healthcare investments though are in the USA, the others are in India. Another investment in CureJoy, a startup that focuses on expert advice on Cure, Fitness & Beauty is offbeat compared to conventional Healthcare investments.

4 Nexus Ventures Partners: This Venture Capital fund invests in startups in the United States or in India. Nexus Partners has invested in 5 companies in the healthcare space. Of these, Lybrate is one big name in the e-health services space which provides teleconsultations with specialists & super specialists.


Nexus Partners co-invested in the Series A round of Lybrate along with Tiger Global and Ratan Tata. The only other Healthcare investment of Nexus Partners, which is headquartered in India is Eye-Q, which is a Gurgaon based startup focusing in the specialty of ophthalmology.

5 SAIF Partners: This VC firm has invested in a number of pharmaceutical manufacturing companies in China. Their only Indian investment in the pharmaceutical sector is IPCA, a market leader in anti-malarial with a fast-growing international presence.


Apart from these, SAIF Partners has led $ 1 Million pre-series A round in YourDost, a start-up providing emotional wellness expert to people and also invested in Care24, a 24-hour healthcare service provider at home. Another investment of SAIF Partners, Qikwell, has been acquired by Practo last year.

6 Indian Angel Network (IAN): With the tagline of ‘For entrepreneurs, By Entrepreneurs’ Indian Angel Network is the biggest group of Angel Healthcare Investors in the country.


It has invested in 6 healthcare companies in the country which are Neurosynaptic Communications, Transcell Biologics, Tattva Spa, Vittas Pharma, Consure Medical & Karmic Lifesciences. Amongst them, Neurosynaptic Communications has its presence not just in India, as the leading telemedicine and digital health solution provider but also operates in South Asia, South East Asia, Africa and the Middle East.


7 Unitus Seed Fund: This leading impact venture seed fund has launched its flagship healthcare initiative, StartHealth Program, in partnership with Pfizer, Narayana Health, Manipal Hospitals and others to accelerate the growth and development of startups providing affordable healthcare solutions to masses in India, through break-through technology.


Out of its five healthcare investments –
3 are seed-funding in Indian startups such as Smile Merchants, Welcare and Medypal.


The fourth one is a series A venture in one-stop-shop pediatric primary healthcare services provider, AddressHealth, headquartered in Bengaluru.

8 Center for Innovation Incubation and Entrepreneurship (CIIE): This startup incubation centre, based out of IIM-Ahmadabad, runs a special accelerator program for MedTech startups along with The Dasra Girl Alliance. With the focus on Medical Devices, Healthcare IT & Biotech, Centre for Innovation Incubation and Entrepreneurship (CIIE) boasts of 7 portfolio companies and 10 accelerated startups.


9 IDG Ventures: This $3.6 billion dollar Venture Capital Fund has 6 healthcare companies in the IDG India Portfolio. IDG focusses on MedTech companies and has participated in the $7 million series B round of Forus Health which has its innovative 3nethra ophthalmology diagnostic device.


The other portfolio companies are HealthifyMe, Axio Biosolutions, Perfint,  Pluss which has now been rebranded to NetMeds and Zumutor Biologics Inc.
10 Blume Ventures: Positioning itself as a seed-stage venture fund that backs startups with both the funding as well as active mentorship, Blume Ventures is one of the most active MedTech investors in the country. They have 3 investments in the healthcare space, namely HealtifyMe, Shantani & Tricog. It participated in the $6 million dollar Series A round in HealthifyMe, an app based weight-loss coach.


Others: The biggest deal in 2016 was when Torrent Ltd, the holding company of the Torrent Group invested $37 million in PurO Wellness to acquire 75% stake in the company started by the former executive director of Torrent Group. PurO Wellness focuses on producing organic food ingredients and will soon launch its SoLite range of products.


Though MedTech has been attracting heavy investments in the last few years, it requires great domain expertise to build a device, technology or even centers delivering this type of care.


This combined with the fact that there is an acute shortage of skilled doctors to treat the existing patients, building startups for a billion people really becomes a challenge. It is one of the biggest, most diverse and unorganized sectors at the moment and just as the startups want to create a disruption in this field, so are the investors who don’t want to lose out a share of the pie in this sector.

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