Unleashing Entrepreneurship: Using Technology and Digitization to Disrupt Healthcare Services With the Government trying to make healthcare accessible for all, the private sector should speed up initiatives & grow faster by adopting innovative solutions
By Rohit M A
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In 2015, Prime Minister Narendra Modi has launched an ambitious programme called "Startup India ", aimed at revolutionising and accelerating the start-up revolution in India. It's a moment of great pride for a country like India where such bold initiatives are already witnessing strong traction. There was an earlier era in India where manufacturing start-up's dominated in the 70s and 80s, and these were supported through seed capital and soft loans by the development financial institutions (DFIs) both at the centre and the state level.
Over the years, start-ups in India have evolved, matured and most importantly its age old talent for entrepreneurship has been unleashed like never before. New ideas are exploding into business models and investors are all lining up to provide the requisite finance and mentoring, to take the start-up to the next round of funding and higher valuations. One such sector that is benefiting immensely is Healthcare sector and Healthcare start-ups which has been at the cynosure within the Indian business environment and this sector has witnessed the emergence of a number of home grown unicorns across the country. The rising demand for better care along with technological advancement has aided the emergence of start-ups in the Indian healthcare sector. New innovations have been introduced that are majorly centred on improving and enhancing connectivity between doctors and patients and easy delivery of medicines.
They are actually leading and bringing in new technologies to the sector and have the potential to emerge as a key member of the healthcare ecosystem through their innovations to promote accessibility and affordability of healthcare services.
Related: This Healthcare Startup Grew to 450 Employees in 5 Years.
As of last year, there are a total of 4,892 start-up in the Indian healthtech space. Last year saw an overall increase of 45.06% in the total investments in healthtech start-up. Overall, the healthtech start-up in India raised a total of $504 Mn between 2014-2018. According to Mckinsey report, India could save up to $10 Bn in 2025, by using telemedicine instead of in-person doctor consultations. Going beyond imparting health-related knowledge, India has also seen a rise in the number of fitness and nutrition start-ups.
The India Brand Equity Foundation has predicted the home healthcare market will reach US$6.21. India is said to have the second largest geriatric population (above 60 years of age) in the world with 87.6 Mn people above the age of 60. Secondly, the busy lifestyle in urban cities has also contributed to the rise in home healthcare. More than 37% of the startups have been building the IOT component and more than 57% of them are building AI component into their products. By 2020, we will see the rise of home healthcare, wellness disease prevention, creation of health records and rise in health service aggregators.
Related: How to Become a Healthcare Innovator
Taking up the challenge to make healthcare services affordable and accessible to the common man, entrepreneurs are using technology and digitalisation to disrupt the healthcare services space. India is the fastest growing and the third-largest start-up ecosystem in the world14. The exponential growth in the number of start-ups has attracted investments from a large number of Private Equity (PE) and Venture Capitalist (VC) firms.
Why invest in healthcare start-ups?
Focussed products / services with the access to scale: If one is looking to solve a focussed problem through a product or service, there can be meaningful potential upside on such capital investments with scale of such offering being a key differentiator.
Disruptive Innovation: While we haven't seen many unique disruptive innovation in the Indian healthcare space yet, it probably had to do with a lot of macroeconomic disadvantages which is now being sorted through various initiatives and building blocks and hence ripe for Disruptive Innovation in both services and products.
Make the ecosystem a partner : Any offering which will look to enhance the capability of the current stakeholders in the system from operators, providers, payors, clinicians and researchers for validation and pushing adoption will probably have a better chance of winning the long race than standalone consumer direct approach
Build to Scale : All healthcare services or products will undergo their strained years for validation and acceptance after which, there has to be volume growth capability ( Ref. Classical J Curve Growth Graph ) to build on such goodwill and thereby unlocking value.
No geographical boundaries : Products or Services which can transcend neighbouring boundaries or also the ones which are able to work across the world to solve their regional requirements will see immense value in utilizing developed payor network access and capitalize on the efficiency of such systems.
Related: App Development and The Healthcare Industry: The Eight Important Factors
Challenges in raising funds
Low returns: Start-ups are characterised by low profitability, with a large number of healthcare start-ups struggling to break even. There are fewer prevalent business models in the healthcare start-up space that can act as a reference; majority of them find it hard to develop a sustainable monetisation blueprint
Finding the right investors: Prospective investors generally lack awareness and expertise in healthcare, which is a highly specialised field. It becomes difficult for entrepreneurs to connect with the right investors and convince them about the viability of business propositions at hand
Long lead teams: In the medical field, it takes anywhere between 10 to 15 years to introduce a new product in the market. PE and VC firms are heavily inclined towards start-ups that generate faster returns i.e. within five – seven years. Long lead times pose a significant challenge for medical research start-ups in attracting investors
Healthcare in India has always posed big questions around accessibility and affordability for most of its population. With the government taking strides, the private sector is certain to capitalize on such initiatives to grow faster in adoption of innovative, experiential, effectives solutions both tech oriented or otherwise. In the end, either of staying invested in some, straying from the possibilities altogether or spraying across investments with the hope that something clicks, each of them are probably meritorious in their own way.
