The healthcare industry is experiencing a steady transformation the world over, majorly with information technology playing a core role in every aspect of healthcare value chain, ensuring faster adaptability of advanced technologies, reduction of service costs, and provision of quality healthcare at affordable prices.

vc fundingIT is increasingly penetrating the healthcare service delivery in India as well, driven by the need to reduce costs, efficiency imperatives, interoperability of existing fragmented hospital systems, and increased health awareness among citizens.

Indian health IT leaders are fundamentally changing the way technology is used for care delivery. Healthcare consumers, providers, and payers are embracing the transformational power of technology, and it is paying off in unprecedented efficiency and effectiveness across the care ecosystem.

VC Funding – Global Scenario

Global healthcare IT/digital health venture capital (VC) funding grew 9 percent Y-o-Y with more than 33,500 crore in 622 deals in 2016, compared to 30,820 crore in 574 deals in 2015. Total corporate funding into healthcare IT – including VC funding, debt and public market funding – came to 37,520 crore in 2016 compared to 53,600 crore in 2015.

VC funding for healthcare IT companies in Q4 was 5661.5 crore in 159 deals compared to 8375 crore in 177 deals in Q3 2016.

Healthcare practice-focused companies raised 10,720 crore in 185 deals, accounting for about 32 percent of the total funding. Consumer-focused companies received about 23,450 crore in 437 deals, accounting for
68 percent of the total funding raised.

The top funded healthcare IT areas in 2016 included mobile apps, which received almost 8710 crore, wearable sensors 39,664 crore, data analytics 3845.8 crore, telemedicine companies 3537.6 crore, mobile wireless companies 1527.6 crore, and wellness 1460.6 crore.

The top VC rounds in 2016 were the 3350-crore round by Ping An Good
Doctor, Chunyu Yisheng's 1226.1 crore, Flatiron Health's 117.25 crore, Jawbone's 1105.5 crore, and Meet You 1011.7 crore.

For the first time, health IT investors crossed 1000. A total of 1115 investors (including accelerators/incubators) participated in VC funding rounds for healthcare IT companies in 2016 compared to 923 in 2015.

Announced debt and public market financing for healthcare IT companies fell to 3571.1 crore in 18 deals in 2016, compared to 22780 crore in 29 deals in 2015.

There were four IPOs in 2016 raising a combined 1567.8 crore compared to seven IPOs in 2015 raising a total of 14,740 crore.

VC Funding – Indian Scenario

health-itHealth IT VC investment in India shrunk in 2016 to 475.7 crore from 1085.30 crore in the previous year even though the number of deals increased to 51 from 33 over the same period.

Notable Indian Transactions in
Q4 2016

  • lHealthians – A Gurgaon-based online healthcare marketplace raised 20.1 crore in Series A funding from BEENEXT, Digital Garage, BEENOS, and others. Healthians has raised 21.5 crore in total funding to date.
  • lDoctor Insta – A Gurgaon-based provider of healthcare consultation through video conferencing, raised 16.75 crore in Series A funding from RoundGlass Partners and BrahmaX Ventures.
  • lSidqam Technologies – A Noida-based provider of clinical software systems for clinics and hospitals, secured 8.04 crore in seed funding from SQue Capital, a Mumbai-based investment firm and Grace Capital Ventures and Soham Vencaps, the family fund of the real estate company Soham Group.
  • lHealthifyMe – Received an additional 6.7 crore in Series A funding from Dubai investor Neelesh Bhatnagar through his firm NB Ventures.
  • lActofit – A Mumbai-based developer of a wearable wristband that tracks fitness activities such as heart rate, set and rep counts, calories, distance, steps, and more raised 6 crore in seed funding from venture capital firm Next Orbit Ventures Fund and an angel investor Nilesh Jain.
  • lIdea Bubbles (Eureka Forbes Good Health) – A Bangalore-based developer of a teleconsultation app, raised 4.6 crore in funding from IvyCamp Ventures, Eureka Forbes, and Shapoorji Pallonji Group.
  • lLetsMD – A New Delhi-based online marketplace that allows users to compare the prices of surgeries at different hospitals secured 6.03 crore angel funding from WaterBridge Ventures, Calcutta Angels Network, Anupam Mittal, Currae Healthtech Fund, and LetsVenture for an 8 percent stake.
  • lRay IoT – Bangalore-based developer of a smart, non-contact baby sleep monitoring device received 67 lakh from HAX Accelerator.
  • lCuro Healthcare Technologies – A Gurgaon-based developer of a diabetes management app raised an undisclosed amount from RoundGlass Partners.
  • lNeurosynaptics Communications – A Bangalore-based developer of a cloud-based telemedicine platform that provides remote screening and primary diagnosis services in India raised an undisclosed amount in Series A funding from Healthquad, Indian Angel Network, and Axilor Ventures.

The future of healthcare IT industry is predicted to be digital and fully inter-connected. Spurring investments, new hospitals, insurance penetration, and regulatory push and manpower shortages will drive the growth of the industry in future.

“The Indian healthcare IT sector is still very small and a few big deals can make the numbers look bumpy. The number of funded deals more than doubled year-over-year. While a lot of them were smaller deals, it is a healthy sign that there are a lot of startups coming up in this space. We expect 2017 to be a stronger year compared to 2016.”

Raj Prabhu,
CEO and co-founder,
Mercom Capital Group


 

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