india's technology healthcare start-ups: profiling and analysis

TECHNOLOGY HEALTHCARE START-UPS: PROFILING AND ANALYSIS

FOCUS MARKET: INDIA

AUTHORS: GURPREET SINGH, MANISH KHURANA

Table of Contents

Healthcare start-ups: Introduction and Ecosystem Slide 4

Category Analysis Slide 7

Investment Analysis Slide 9

Opportunities Slide 15

Research Methodology Slide 17

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4

Healthcare Start-ups – Introduction

Reference 1: http://wdi.worldbank.org/table/2.15

CHALLENGES IN INDIAN HEALTHCARE

•Healthcare delivery system is evolving in India with a number of start-ups serving different elements in the value chain

•The doctors to patient ratio1 of 0.7 per 1,000 people in India is one of the most abysmal in the world – this is all the more reason for innovation to happen in the healthcare value chain

•The ratio goes further down to 1:60,000 in the rural areas

•US has about 20,000 oncologists, whereas India with more than 1.25 billion population has just around 1,500 oncologists

•The number of hospital beds per 1,000 people in India is just 0.7. This puts tremendous pressure on the existing public healthcare infrastructure1. The global average of beds per 1,000 people is 2.9

•The number of nurses and midwives per 1,000 people in India is 1.7. This ratio is again quite low given that this support staff have to cater to a large population1

ADDRESSING THESE CHALLENGES

•Healthcare delivery system is evolving in India with a number of start-ups serving different elements in the value chain

•Most of these start-ups are service-oriented with following dominant services:

•Enabling patients to connect with doctors

•Getting price transparency in diagnostics and surgeries

• Increasing access to doctors (especially for patients living in rural areas)

•Other services include electronic medical record management

•So far, no start-up has been valued as a unicorn. Most of the start-ups are still quite young (less than 5 years of existence) and their business model and offerings are evolving

ChallengeImprove healthcare delivery especially in the rural sector

OpportunityStart-ups with their wide range of offerings can help bridge the gap in the access to quality healthcare between urban and rural India

http://wdi.worldbank.org/table/2.15

Healthcare Start-ups - Ecosystem

Pre-delivery / Diagnostics

Healthcare Service Delivery

Hospital In-home

Post-consultation care

Care awareness

Emergency Support

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Price Aggregator

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Category Analysis

• Research suggests that most start-ups are focusedon Telemedicine and Appointment Booking

• It is healthcare delivery in rural sector that presentsthe maximum opportunity as patients have little tono access to doctors

• Among the firms with promising potential to grow,Neurosynaptic Communications has product as wellas solution offerings to serve people in rural areas

• In-home Medical Care is another category wherethere is a lot of interest and there are few firmswith only this single offering

• Bengaluru hosts the most number of healthcarestart-up firms followed by Gurugram and Mumbai

EMR – Electronic Medical Records7

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Summary - Investment in Healthcare Start-ups

12

13

4

< 1 mn

1 to 10 mn

> 10 mn

Number of Start-ups by Investment Slab

221.9

32.34.3

Total Funds Raised in Each Slab

> 10 mn

1 to 10 mn

< 1 mn

• Four companies have received more than $10 million funding. Together these four companies, have raised $222 million.

• There are 13 companies in the '1 to 10 million' category (mid-sized), with a collective investment of $32 million

• 12 companies comprise of the ‘< 1 million’ set (small-sized), with an aggregate investment of $4.3 million

• Across all categories, there are a total of 21 companies active in telemedicine

• Other popular categories include Appointment Booking, Diagnostics and In-Home Medical Care

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Analysis of Firms with funds raised > $10 million

• Total funds raised - $222 million or 86% of the total funds raised by healthcarestart-ups. These are the BIG 4 of India's healthcare start-ups

• Practo rules the investments roost with $124 million and offers a host of services

• Portea Medical offers In-home Medical Care and Diagnostics, while Nightingales ispurely focused on In-home Medical Care

• Appointment Booking, In-home Medical Care, Diagnostics and Telemedicine mayhave already set the direction for technology-oriented healthcare start-ups inIndia

• These categories rightly attempt to address the challenges in the healthcaresector in India by making healthcare more widely accessible to people

• For instance, India's patients to physicians ratio at 0.7:1000 is lower than WHO'sprescribed ratio of 1:1000.

• With Telemedicine, patients can reach out to doctors at least for non-criticalailments and for second opinions. Thus, reducing the challenge of lack ofadequate physicians to some extent

• Other interesting category is In-home Medical Care. India's has 0.9 hospital bedsper 1,000 people vs global average of 2.9 for 1000. The situation is even worse inrural India. In-home Medical Care can help address this issue as these firmsexpand in tier-II and tier-III cities

124.0

46.5

40.0

11.4

Funds Raised ($ mn) in > 10 mn Slab

Practo

Portea Medical

Nightingales

Lybrate

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Analysis of firms with funds raised in $1 to $10 million slab

6.0

4.4 4.03.2 3.0 2.5 2.0 2.0

1.2 1.0 1.0 1.0 1.0

Funds Raised ($ mn) in 1 to 10 mn Slab • This is an interesting set of companies that are actively seeking to raise more

funds to grow

• If we look at the investors’ profiles, for example, Welcome Cure is backed by

one of India’s largest media house, while Care24 is backed by Aegis

• Even the relatively smaller ones in this set have interesting investors

• Department of Science and Technology being one of the investors in

MediAngels

• Healthcaremagic was funded by Accel Partners and got acquired by US-based

Ebix – a provider of software and eCommerce solutions for insurance firms

• DoctorInsta is backed by RoundGlass Partners – an active investor in digital

health and wellness space globally

• Tele-consulting, Diagnostics and In-home Medical Care are the categories

where most of these firms operate

• There could be potential synergies between these firms and the BIG 4

(operational efficiency, increasing regional presences, increasing number of

registered doctors)

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Analysis of firms with funds raised < $1 million

0.9 0.80.7

0.5 0.5

0.30.2 0.2 0.1 0.1 0.1 0.1

Funds Raised ($ mn) in < 1 mn Slab • These set of companies are relatively early in the lifecycle and it will take

some time to reach a notable scale – they are not more than three years old

• Eureka Forbes Good Health (EFGH) backed by Eureka Forbes, one of the top

health-focused consumer durables firms in India, offers one of the widest

spectrum of services including Telemedicine, Appointment Booking,

Diagnostics and EMR

• Other firm offering one of the broadest range of services is PurpleHealth; it

offers Appointment Booking, Tele-consulting, In-home Medical Care and

Price aggregator

• Healthcare financing and Price Aggregator are unique key service offerings

in this group compared to the other two groups of start-ups

• Notable firms include Medikoe offers Price Aggregator and Marketplace

services and LetsMD offers Price Aggregator and Healthcare Financing

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Analysis of firms with no funding data available

• This is the set of companies for which no funding data could be obtained

• One of the things that has been common in all set of companies is the

services they offer; even these companies are mostly active in

Telemedicine, Appointment Booking, Diagnostics and In-home Medical Care

• Healthcare at Home is one of the most innovative start-ups offering ICU at

home services

• This certainly goes well with the challenges of lack of beds and a declining

trend of nursing professionals

• Apart from this, this set of firms also offer other services such as MIS, EMR

and Price Aggregator

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Opportunities

Access of Quality Healthcare in Rural Areas

• One of the biggest opportunity lies in finding ways to increase access to good quality healthcare in rural areas where otherwise the doctor to patient ratio is abysmal

• Neurosynaptic Communications is one firm which is doing notable work in taking healthcare to rural areas in a holistic manner with its range of solutions. There is space for more firms to operate and thrive in this space

In-home Healthcare Delivery

•The in-home healthcare delivery market is expected to grow at a CAGR of 9% and estimated at $349 billion

•This section of the growth in healthcare market can be attributed to means of double household income, changes in social structure of families, and an increased need for geriatric care

•HealthcareathomeIndia is providing service of ICU at home service. It is firms like these that can provide an alternative solution to the low number hospital beds in India

Other Big Opportunities

• Single specialty hospitals across tier-II and tier-III cities – The number of hospital beds per 1000 people in India is still quite low and there is a need for more hospitals in smaller tier-II and tier-III cities

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Research Methodology

Identified and profiled technology-oriented healthcare startups that began operations in last eight to ten years

Filtered the companies that offered services to patients; excluded those that offered enterprise-only solutions

Capture their service offerings and investments data from secondary sources including various news websites and technology blogs

To understand the variation in funds raised by these Start-ups, we’ve categorised them into three investment slabs: ‘< $1million’, ‘$1 to $10 million’ and ‘> $10 million’

Total Companies Identified: 47

Total Companies for which funding data was available: 32

Following categories have not been included for this research:

* Pharmacy

* Firms with software offering for MIS in healthcare

* Social networking of doctors

* Healthcare concierge

* Fitness Start-ups

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THANK YOU!

Gurpreet [email protected]

Manish Khurana+91-903-600-8036

[email protected]

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