Healthcare technology space proving to be a gold mine for startups

According to private investment-tracking firm Tracxn, digital healthcare start-ups received about $565 million in 2018, an all-time high and 43 per cent higher than the previous year

For India’s startup entrepreneurs, the opportunity to resolve health issues using advanced technologies is turning out to be a magnet. No wonder then that the healthcare technology space has emerged as the biggest startup sector in terms of venture capital investments. 

According to Tracxn, a private investment-tracking firm, digital healthcare start-ups received about $565 million in 2018, an all-time high and 43 per cent higher than the previous year. The figure suggests investors’ confidence, as well as business opportunity, in healthcare space, a sector that has long suffered due to the country’s high population, poor infrastructure and a perennial dearth of doctors and medical institutions.

The pain points are now being addressed, thanks in part to a smartphone and internet revolution that is currently underway.

“In recent years, several technology innovations have significantly transformed the Indian healthcare ecosystem. The country’s rising population, scarce human resources, and inadequate infrastructure (0.9 beds per 1,000 patients), coupled with low doctor-to-patient ratio (0.62 doctors per 1,000 patients), lead to an increased demand for advanced integration into healthcare,” says the KPMG report #IndiaTrends2018. “Digital adoption and literacy could facilitate growth of the healthcare market from $110 billion in 2016 to $371 billion by 2022,” the report added.

Long before Reliance Jio brought data prices down rock bottom, Shashank ND, an engineer fresh out of college, had started Practo, one of the first firms to leverage smartphone and internet. Practo’s mission was simple — there was an information gap in finding doctors/specialists in the vicinity of the user, and this could be fixed through an app-based business model. Practo created a repository of doctors that a user could access and book appointments with. Though aimed initially at metropolitan cities, the service has now grown deeper and wider and become the largest in India today.

Along the way, top names in venture capital, such as Sequoia Capital, Matrix, and Google’s VC arm Capital G, supported Practo’s growth. Practo, too, launched in other verticals like delivery of medicines and booking of lab tests. But the most profound impact of Practo’s success was inspiring other start-ups to come in the health care space.

Tracxn data show that over 100 start-ups have been incorporated in the digital healthcare space every year since 2015. 1mg, a Delhi-based start-up carved out from pharmacy chain HealthKart in 2015, started with a mission to solve online sales of over-the-counter medicines and drugs. Today, there are at least a dozen ventures in this space, including Netmeds, Medlife and Zoyo, all backed by VCs. 

The scope of healthcare services available over apps has only expanded since. There now are apps that let you video-chat with a doctor from the comfort of your home. 

You now can also key in your health stats and eating patterns and allow the app to tell you the health risks that you face. Known as predictive analytics, this basically mines patients’ data to identify risk factors and prescribe preventive treatment. 

There has also been a major leap on the hardware side, where devices in the market let you track vitals like heartbeat and blood-pressure. These devices can alert you if your vitals drop or expand abnormally, besides feeding data to the system that could later make more precise analytics.

“Technologies like electronic medical records (EMR), mobile health, telemedicine and big data systems are likely to have a promising future in the coming years,” the KPMG report said.