State of the HealthTech Market in India
Exploring the HealthTech Trends in India and startups addressing them.
Hi there!
This week on Eximius Echo, we're exploring the dynamic HealthTech industry in India, delving into its evolution, key emerging trends, and how startups are addressing healthcare needs for both businesses and consumers. The article aims to provide a high-level overview of the innovation already witnessed in the sector and outline the anticipated growth in the next phase. While this serves as an overview, our upcoming posts will dive deeper into these segments for a more comprehensive understanding.
If you’ve not heard of us so far, Eximius is a sector-differentiated fund focusing on FinTech, SaaS, Media & Gaming, and HealthTech. You can find out more here. This newsletter is an attempt to share ideas, insights, and context within the realms of our chosen sectors. Let’s dive in.
The HealthTech market in India has been growing rapidly, expected to reach a whopping $25 billion by 2025. The landscape teeming with over 3,500 startups, ranging from AI-powered diagnosis apps to platforms seamlessly connecting patients with top-tier doctors. This market is slowly evolving into a cohesive ecosystem of innovation, transforming how we approach healthcare in the digital age.
In 2021 alone, the funding frenzy for HealthTech startups reached an impressive $3.76 billion, signalling a significant leap in investment. But the momentum doesn't stop there – the figures for 2022 and 2023 further underscore the sector's growth, making it clear that HealthTech is here to stay - and grow!
The Evolution of Indian Healthcare
The evolution of healthcare has witnessed a transformative journey from traditional models to the integration of cutting-edge technologies. Traditional Healthcare, comprising hospitals and clinics, was the bedrock of medical care. Healthtech 1.0 introduced a digital shift with teleconsultations and e-pharmacies, enhancing accessibility. Healthtech 2.0 brought Phygital Models, merging physical and digital, with innovative solutions like activity trackers and Digital Health Records. In Healthtech 3.0, Big Data integration, AI/ML, remote monitoring, genomics, and robotic surgeries redefine healthcare, emphasising personalisation and advanced technology.
Strong macro tailwinds supporting this evolution:
Untapped Demographics: In Tier 2+ cities in India, healthcare delivery struggles with a doctor-to-patient ratio of 1:854, leading to a significant shortage of specialists in rural health centres for about two-thirds of the population. The fast-growing population accentuates the need for broader healthcare access, pushing existing doctors to extend their reach.
Changing Preferences: The pandemic has accelerated the adoption of digital health technologies in India, enabling remote access to quality care. This trend is set to continue with increasing internet and smartphone penetration, fostering greater adoption of digital health due to rising comfort and awareness regarding quality and preventive care.
Government Support: Backing HealthTech initiatives, the government has introduced policies like the Ayushman Bharat Digital Mission (ABDM) - to establish a centralised digital health ecosystem. With substantial healthcare expenditure (~3% of GDP) and robust policy frameworks, the HealthTech sector in India is positioned for further growth.
With the HealthTech market growing rapidly as well as facing various challenges, we decided to examine the primary healthcare needs for both consumers and businesses to determine trends shaping the next generation of growth in the segment. Our goal is to explore the key trends and identify companies that have achieved significant revenue in this evolving landscape.
HealthTech Trends for Customers
HealthTech B2C represents a dynamic force reshaping the healthcare landscape, offering consumer-focused innovations across various domains. These comprehensive services aim to provide accessible, efficient, and personalised healthcare solutions.
Preventive Care: In the realm of preventive care, we’re seeing the emergence of a distribution-first model aimed at fostering wellness awareness, particularly in Tier 2+ cities in India. Key startups solving this need include the likes of HealthifyMe, Cure.fit, Karkinos, Fittr, Niramai, etc. While the first wave of innovation focused on horizontal solutions, the next set of companies will solve specific user personas (elderly, children) and use cases. The introduction of omni-channel solutions tailored to the growing elderly population ensures a holistic and accessible approach to health maintenance.
Screening, Tracking, and Diagnostics: Incorporating advanced data-driven models, startups like Dozee, Orange Health, Cureskin, Dr Lal Pathlabs, and several more have been focusing on making healthcare interoperable. However, there is an increasing need for vertical, full-stack platforms that facilitate real-time insights into pain management, lifestyle diseases, and other health aspects, enhancing the efficiency of screening, tracking, and diagnostics. Looking ahead, the emergence of Generative AI will further enable start-ups to utilise unstructured data to tailor care solutions for niche customer segments.
Managed Care: The 'Smart Clinics' concept, based on an asset-light model with extensive networks, reflects a commitment to providing patient-centric, affordable quality care. Startups like Portea, Emoha, BeatO and Wysa are solving a growing need for omnichannel care platforms that extend their reach to address critical chronic issues such as Cancer, Thyroid, and Sexual Wellness, ensuring a comprehensive approach to managed care. There is a growing need for disease-specific hybrid subscription care plans to emerge across sub-verticals.
Women’s Health: Many innovative startups like Proactive For Her, Sanfe, PeeSafe, Carmesi, The Moms Co, and others have been attempting to revolutionise women's health through products and care solutions. With increasing purchasing power parity of this user segment and active lifestyle, there is a need for omnichannel platforms catering to diverse age groups and causes, spanning issues like PCOS, conception, breast cancer, and a spectrum of incidents such as anorexia, IVF, surrogacy, postnatal care, and menopause.
Financing & Insurance: In the domain of financing and insurance, HealthTech platforms like Coverself, Access Healthcare, and Medpay play a vital role in supporting public health initiatives. These include disease surveillance, immunisation campaigns, and interventions. Startups are also exploring diverse opportunities beyond traditional services, offering flexible health insurance policies with value-added services for Tier 1 as well as Tier 2 segments.
HealthTech Trends for Businesses
HealthTech, also evolving for businesses, is at the forefront of transforming healthcare services for professionals and entities in the industry. This sector encompasses solutions tailored for doctors, clinics, hospitals, diagnostic labs, pharmacies, and financing and insurance providers.
Doctors, Clinics & Hospitals: For healthcare professionals and institutions, startups like Deeptek, Medvarsity, Eka.care and Doxper are building to simplify practice management and patient engagement solutions with a particular focus on rural and semi-urban India. These initiatives are geared towards streamlining operations and elevating the overall patient experience. The adoption of interoperable and vertically integrated clinical decision support systems, integration with ABDM, and the incorporation of technologies like AI and analytics are empowering medical professionals. This empowerment enables them to make informed decisions, setting the stage for the emergence of the next wave of trends in healthcare practices.
Healthcare SaaS: SaaS companies are on the rise, focusing on specific healthcare areas like oncology, cardiovascular, radiology, and diabetes. The advantage of these companies is their niche focus in large markets. The longer they operate, the better their AI models become, trained on real-life data and images, enhancing the quality and accuracy of outcomes. While horizontal companies like Innovaccer and Indegene provide clinically sound outcomes, vertical companies like Tricog, Karkinos, Qure.ai, and Deeptek produce clinical insights based on years of patient data, giving them a competitive advantage and acting as a protective barrier.
Diagnostic Labs: Startups like Neuranics Lab and Adsys are actively catering to the requirements of diagnostic labs by offering comprehensive, vertically integrated solutions. These solutions automate vital processes like data management, supply chain logistics, and compliance adherence within the lab setting. The upcoming trends will be shaped by the advent of distribution-first, asset-light labs that employ innovative go-to-market strategies to broaden testing capabilities, especially in rural and semi-urban areas.
Medicines and Medical Equipment: Within the realm of pharmacy SaaS and B2B procurement platforms, companies like Pharmeasy, Ascent, and Medikabazaar are building comprehensive solutions that cover multiple facets of the pharmaceutical supply chain. The next trend wave is anticipated to arise from vertically integrated marketplaces embedded within pharmacies, offering additional value-added services. This approach aims to tackle challenges in the supply chain while enhancing the overall efficiency of pharmaceutical services.
Financing & Insurance: In B2B, there's a growing trend of using embedded lending and insurance plans, led by companies like AyushPay and Arogya Finance. These solutions provide customised policies and financing options for healthcare needs. Using no-code platforms to easily integrate with existing systems, allows healthcare providers to start financing at the point of sale. There's also a rise in specialised offerings like hospital financing and education loans designed for healthcare professionals. These trends show how simple and innovative financial solutions are helping the healthcare industry.
In a country as vast and varied as India, achieving equal healthcare access poses a significant challenge. With a population exceeding 1.3 billion residing in both urban cities and remote villages, there are noticeable gaps in traditional healthcare services. Technology comes up as a promising solution, with numerous innovative startups addressing both holistic and niche healthcare needs. While this article provides a high-level view of emerging trends, our upcoming editions will delve deeper into each aspect.
If you're venturing into HealthTech or have innovative ideas in this space, we're eager to hear from you. Reach out to us at pitches@eximiusvc.com.
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