Funding into HealthTech companies plunges 55 percent in 2022, reveals report

According to the report, only two $100 million+ funding rounds took place in 2022, compared with 10 during the previous year.

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Tracxn, a global SaaS-based market intelligence platform, on Wednesday revealed that it has released its Tracxn – HealthTech India Report ahead of World Health Day. The report, based on Tracxn’s extensive database, provides insights into the Indian HealthTech space.

Total funding into the HealthTech sector plunged 55% from $3.2 billion in 2021 to $1.4 billion in 2022. This drop is majorly due to a massive decline in late-stage investments from $2.4 billion in 2021 to $606 million in 2022, a drop of 75%.

Seed-stage funding also fell 52% year-on-year (YoY) to $75.2 million in 2022. However, early-stage funding rose 26% YoY to $743 million in 2022. Further, 70.3% of the total funds raised throughout 2022 were recorded in the first half of the year.

“While investor interest in the HealthTech sector skyrocketed in the pandemic period, the space started experiencing a declining trend in funding from Q4 of 2021. Due to the funding winter, current macroeconomic conditions, and rising interest rates, investors across the globe have become more cautious in spending their money. This trend has been observed in the HealthTech sector as well. Despite this downturn, higher digital adoption and favorable government policies are expected to increase the activity in this space. Advancement in technologies like AI, robotics, cloud computing, data analytics, and IoT are also expected to improve the Indian HealthTech sector,” the company said in a statement.

Though this space witnessed a sharp decrease in investments in 2022, it is still the second-highest funded year in the past decade, after 2021. The pandemic has made people more aware of the importance of health, which has led to the increased usage of digital health services and driven the growth of this space.

According to the report, only two $100 million+ funding rounds took place in 2022, compared with 10 during the previous year. Digital healthcare platform MediBuddy raised $125 million in a Series C funding round from Quadria Capital, Lightrock India and others. Consumer nutrition platform HealthKart raised $135 million in a Series H round from Temasek, A91 Partners and others.

Online pharmacy Tata 1mg was the only Indian HealthTech company to become a unicorn in 2022. The company raised $40.8 million in a round led by Tata Digital, with participation from KWE Beteiligungen AG, HBM Healthcare Investments and others. This raised the company’s valuation to $1.3 billion, making it a unicorn.

Telemedicine services provider Lytus was the only company from this sector to go public in 2022. The sector recorded 18 acquisitions in both 2021 and 2022. Acquisition of Clinix, provider of online consultation services with doctors by MediBuddy and acquisition of AQFIT, developer of fitness trackers by Deep Nordic were the major acquisitions witnessed in 2022

Among Indian cities, HealthTech companies in Bangalore and Mumbai have attracted the maximum investment till date ($3.1 billion each), followed by Gurgaon ($1.1 billion). Sequoia Capital, Accel and Chiratae Ventures are the top investors in HealthTech India segment till date.

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First published on: 29-03-2023 at 16:35 IST
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