Are Indian Healthtech Start-ups Racking Up Enough Funding?
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Technology has changed the way people do things. From shortening distances to changing the way one treats illnesses, technological innovations continue to make things simpler.
Keeping in tune with the rest of the world, an enormous amount of funding has made its way into the Indian start-up ecosystem in the last few years, thanks to investors such as Japan-based SoftBank and U.S.’ Tiger Global Management. These investors have pumped up their interest in the country with funds across the various tech companies that keep propping up on the map.
Risk-Averse Mindset of the Investors?
According to a report by the Indian Brand Equity Foundation, India ranks third among the most attractive investment destinations for technology transactions in the world. In 2017, a thousand new companies incorporated themselves in India, the report said.
While technology is getting a lot of interest from investors and funds, how much funding are healthcare-related start-ups able to raise? According to a report by The Indus Entrepreneurs (TiE) and Zinnov, of the thousands of start-ups in India that were getting invested in, only 11 per cent of the 815 belong to the healthcare sector.
“Investors have their own criteria, revenue being one of them,” Geeta Majunath, co-founder of Niramai, a health-tech start-up, said. “Healthtech start-ups take time to show high revenue scaling.”
According to Manjunath, challenges in healthcare or even healthtech are higher than nascent-stage companies in other sectors. She said these companies take time to produce return on investment while high-equipment costs push the risk higher.
Mixing the Industries
Technology has seeped into industries such as real estate, travel, hospitality and consumer, gradually making advances in the healthcare ecosystem as well. According to investors, the idea is to look at technology and healthcare as one and not two separate entities.
Schwark Satyavolu, General Partner at Trinity Ventures, said the scope of using Artificial Intelligence (AI) and Machine Learning (ML) can be extended to the space of healthcare, “AI and ML are technologies with exciting applications across industries, from the enterprise to healthcare, education and every sector imaginable.”
Technologies should not be compartmentalized into sectors and one should rather “see them as critical ingredients changing how all the other industries work,” he added.
Bhaskar Majumdar, founder and managing director of Unicorn India Ventures, said that startups in fast moving consumer goods, heathcare and other impact sectors are getting funded as marquee investors or funds like Sequoia, Accel are betting on them. In June, Sequoia India invested in healthtech startup Pristyn Care while Accel Partners provided funds into Onco, a start-up that aims to become the one-stop destination for all cancer-care related needs.
Technology Will Attract Capital
While in India, the state of funding in the sector maybe ambiguous, healthcare has, in fact, broken records in private equity-related deals in North America. Satyavolu quotes a report from Pitchbook which states that in all, 692 transactions were completed in healthcare investments adding up to $86.1 billion in the continent.
“The trend keeps changing based on technology but end of the day business continue(s) morphing itself with use” of these technologies, said Sanjay Mehta, founder and Partner at 100X.VC.
The general consensus about tech versus other sector start-ups getting funds is one that continues to do the rounds. But how long would this trend last?