Start-ups give healthcare a better deal

By: | Published: September 28, 2016 6:35 AM

India's healthcare market has grown at 11% annually over the past six years and is now expected to take a leap and grow at 23% CAGR in the next five years, according to VCCEdge.

The sector has witnessed 558 funding transactions worth .657 billion since 2012. Start-ups contribute to 13% of the invested amount across 336 deals.(Reuters)The sector has witnessed 558 funding transactions worth .657 billion since 2012. Start-ups contribute to 13% of the invested amount across 336 deals.(Reuters)

India’s healthcare market has grown at 11% annually over the past six years and is now expected to take a leap and grow at 23% CAGR in the next five years, according to VCCEdge.

The sector has witnessed 558 funding transactions worth $5.657 billion since 2012. Start-ups contribute to 13% of the invested amount across 336 deals.

Thus far in 2016 the sector saw 88 investments amounting to $397.41 million with healthcare start-ups comprising 73 transactions amounting to more than $100 million, VCCEdge said.

Though the number of deals for 2016 YTD have declined from 2015, the angel/seed and venture capital funding deal values for 2016 YTD are either at par or have surpassed those in 2014. Investors in healthcare are chasing a combination of brick and mortar and technology opportunities. The search is on for innovative ideas which show evidence of making returns, it added.

Start-ups are garnering a significant share of the investment activity in healthcare. Consumer centric business models with digital modes of service delivery (such as facilitating doctor appointments, efficient information management system and online pharmacies) have been attracting investor interest.

The supply of services in tertiary healthcare primarily in urban areas (concentrated largely in corporate healthcare) is far more organised and intensive than in semi-urban and rural areas.

Demand & Supply alignment a long way to go. Nearly 90% patients need primary and secondary care. While technology is an enabler it is not alone sufficient for driving changes to the sector as a whole unless the essentials, i.e. the 3As— Awareness, Affordability and Accessibility — of the healthcare delivery model are fulfilled.

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