With chatbots, drug-comparison apps and mobile healthcare platforms attracting recent funding, India’s health-tech startups appear to be on a fundraising tear.
In the past three years, 183 healthcare startups have attracted $600 million in early-stage funding, Inc24’s deal database finds. Including later-stage private equity funding, private investment in health care reached $1.2 billion in 2016, a 13-fold increase in five years. But that barely makes a dent in the $245 billion in additional healthcare investments needed by 2034, according to new research from PwC. A recent report from the University of Washington ranked India’s healthcare system 143 out of 188 in the world.
India’s public investment of less than 1.5% of its GDP in health ranks at the world’s bottom, according to PwC.
PwC’s report contained a silver lining: The needed investment “can be reduced by $90 billion by focusing on preventive care, leveraging technology to deliver care and shifting care from hospitals to homes.” The social enterprise sector has been heeding the call.
Many of the startups are “me too” companies rolling out products and services similar or identical to other models already in the market, Inc24 reports. (We’ve noticed that too as we’ve been tracking recent funding of health information hubs like HealthMir and Credihealth).
But even “me too” startups can contribute to what PwC calls “winning leap” solutions: encouraging more home care, mobile health, and focusing on preventative medicine. These ideas should be encouraged with new types of funding because they give India’s strained healthcare resources more capacity, and reduce costs of patients, most of whom cover health expenses out of pocket.
“If we get this right, 340 million more people will have access to quality healthcare, 4.3 million additional employment opportunities will be generated, and ₹141 billion ($2.2 billion) will be saved for the country by preventing daily loss due to heart disease, stroke and diabetes in the next five years,” the report concludes.
The report calls for greater institutional investor participation in India’s healthcare sector through public-private partnerships, long-term debt, and social impact bonds to catalyze such ideas.
It suggests the Indian government can encourage private health investment by increasing its own commitment to 2.5% of GDP by 2025 and by financing healthcare infrastructure.