There’s a $30 Billion Opportunity in Indian Healthcare Tech
Private sector should mentor as well as fund startups that grant access to healthcare, KPMG says.

Global management consultancy KPMG has identified a multi-billion dollar need for healthcare in India, which will be filled by tech firms.

Startups will be key to providing healthcare to underserved rural Indians, but there are significant funding barriers to overcome from perceived low returns and lack of glamour, according to a recently published KPMG report.

India only spends 4.7 percent of its GDP on healthcare, and 70 percent of India’s population – some 892 million people – live in rural areas with no or limited access to hospitals or clinicians.

In the next five years, India requires up to 700,000 beds to meet its growing healthcare needs: an investment opportunity of $25 billion to $30 billion.

Startups will be the main driver of increasing health access by reducing or eliminating travel times to receive care. However, “even though multiple advantages are provided by healthcare startups, they have not yet received a steady stream of funding to support their venture.”

Health tech startups tend to be service-based platforms – and these tend not to be unicorns. Other barriers that funders face include low returns and long lead times to get those returns.

The solution, the paper says, is two-pronged. Local and national governments should encourage funding by setting up startup hubs and a healthcare innovation fund. Meanwhile, the private sector has a “dual responsibility of a guide and investor for the development of healthcare startups in India.”

As well as offering funding, “it is essential that the major hospital chains, pharmaceutical companies, and diagnostic labs take charge as mentors to the healthcare startups.”

In 2015, private equity firms channeled $16.8 billion to India’s startup system. Some $1.6 billion of that was in the healthcare system. A total 300 Indian healthcare startups were created in 2015.

While the paper declined to specifically mention startups by name, KPMG said the most highly funded startups were in areas including online prescription ordering, home health care, and doctor referrals.

Vishal Bali, co-founder and chairman of Medwell Ventures, told the Economic Times: “Startups are already disrupting the way healthcare is delivered in India.

According to the NASSCOM Startup Ecosystem Report 2015, India serves as the fastest growing startup base worldwide and 6-8 percent of the recent B2C startups in India have been in the health-tech sector.”

India’s top health tech startup areas, by 2015 funding

  1. Appointment booking: $790 million
  2. Mobile health apps: $750 million
  3. Telemedicine: $439 million
  4. Wellness: $386 million
  5. Data analytics: $294 million

(all figures in US$)

 

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