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With 4 Unicorns And $2.2 Bn

In Investments, Healthtech
Funding Shoots Up 
BY SREEKUMARAN N
19 Jan'22 | 8 min read

The healthcare infrastructure is woefully

inadequate in India. The Covid-19 pandemic
brutally exposed the miserable conditions. As the
second wave hit in March last year, the
infrastructure, whatever minimal it was, collapsed
in no time. All the available healthcare facilities
were swamped with patients. Hospitals ran out of
beds. ICUs were crammed. Even make-shift
hospitals could not take the load. Ventilators were
far and few between. Oxymeter was scantily
available. Ambulance services were inaccessible
even in cities. Even paracetamol was scarce. That
a large number of Covid patients died at hospital
gates without getting oxygen support tells a tale.

Startups in the healthtech space gained

prominence in 2021 as they aimed to fill the
yawning gap in this sector and bring in
innovations. Online pharmacy, for instance, caught
the attention of consumers as well as investors.
With health consciousness improving in the
aftermath of Covid-19, fitness and wellness
startups too hogged the limelight last year.
Healthcare at home service, etc. is another
segment that found many takers. 

Artificial intelligence has opened an entirely new

vista.  Its use is being explored across the
spectrum – from diagnosis and treatment to drug
discovery and clinical trials. 

Explore Inc42's 2021 In Review

Potential Of Healthtech Sector

Vis-à-Vis Fund Inflows
With the digital economy attracting global and
domestic investors, the Indian startup ecosystem
closed the year 2021 with $42 Bn inflows.
Healthtech was one sector that got a big push
even as the Covid scare cast a shadow throughout
the year. The startups in this sector received $2.2
Bn in funding across 131 deals, Inc42 data shows.
For the huge potential it has, the healthtech space
minted four unicorns in 2021, announcing the
sector’s coming of age.

It is a different story that ecommerce (10.6 Bn),

fintech ($8 Bn), edtech ($4.7 Bn) outshone
healthtech in terms of funding. According to Arun
Natarajan, Founder, Venture Intelligence,
healthtech is considered a safe bet but returns to
investors are not as high as is in the case of
fintech and ecommerce sectors. This explains low
funding in healthtech startups compared with
ecommerce or fintech.

2021
INREVIEW

HealthtechstartupsRecorded
4.8xJumpinFundingin2021
2500
150

131
124
2000

100
93
FundingAmount(s

DealCount

1500
82
73
65
60 2199
1000

50

500 28

532 546
456
327 352
144 195

2014 2015 2016 2017 2018 2019 2020 2021

CalendarYear

DealCount FundingAmount($Bn)

Source:Inc42Plus
Note:2021fundingdatatillDecember29th Inc42

Distressed Healthcare Sector

The ills plaguing the healthcare sector are many.

Abysmally low government spending on
healthcare, poor doctor-patient ratio,  ill-equipped
hospitals, insufficient number of labs and
diagnostic facilities, lack of access to hospitals,
absence of medical records of patients…. the list
is long.

The public spending on healthcare, as a

percentage of GDP, was a mere 1.2% before
finance minister Nirmala Sitharaman effected a
huge increase in the budget last year.

There is less than one doctor (0.82) per 1,000

people where the World Health Organization
recommends at least one doctor per 1,000 people.
The picture of healthcare workers, including
nurses, is equally appalling.

Astute investors see good opportunities in this

under-developed market. Look at this projection:
the healthtech market in India is estimated to grow
at 27% CAGR to $21.3 Bn by 2025 and enjoy a
share of over 3% of the global market.

But the funding is perhaps not in tune with the

potential it has. According to Inc42 analysis, since
2014, the healthtech sector has attracted a total of
$4.7 Bn. A closer look at healthtech startup
funding trends since 2014, however, points to an
uneven pattern. Though funding saw a rise in
2015, 2017, 2018 and 2019, it slipped in 2016 and
surprisingly in 2020. In the pandemic year of 2020,
healthtech startup funding declined to $456 Mn
from $546 Mn in 2019.

Healthtech is, of course, a recession-proof sector,

said Natarajan, adding that it was not considered a
hot investment destination by venture capitalists till
a few years ago. “Who would have thought of a
Serum Institute or Bharat Biotech,” he wondered. 

The gestation period is long and by the nature of

the business, the whole cycle is longer. But
healthtech always got a look-in when the going
was tough in the IT sector. The pandemic,
however, changed all that perception and there
were 3,548 active startups in the healthtech space
in 2021, accounting for 8.9% of the startup world
that comprises 39,960 companies.

Healthtech Startups Sprout As

Focus Shifts To Battling Covid 
As battling Covid became the top-most priority, a
slew of blockchain startups came up with novel
methods for tracing and testing that were pivotal in
the battle against the pandemic. Quillhash, Hipla,
Aiisma, Tagbox, Yosync, MacAppStudio are a few
to name. Founders of startups like Bounce, Vokal
and Urban Company collaborated to create
Quarantine app (Q-app) as well. 

MFine launched MFine Pulse, an app-based

SPO2 monitoring tool that enables users to track
their blood oxygen levels using just a smartphone.

Startups such as 1mg, PharmEasy, MFine, Practo,

Healthians and Portea at-home Covid-19 sample
collection services for antibody, antigen and RT-
PCR tests.

Portea extended Oxygen support and supplies

cylinders and concentrators for patients who are
recommended to have oxygen. 

Navia Life Care offered video consultation, and the

service is currently used by thousands of doctors
across the country. The company has curated a
panel of Covid-19 specialists for patients trying to
find specialist doctors for treatment.

Navia, MFine and several other startups too

offered similar suites of services.

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Online Pharmacy Is The Leader

By A Good Distance
Fitness & wellness and healthcare analytics
figured among the top sub-sectors in 2021 but it
was online pharmacy that saw the most action
during the year. Online pharmacy cornered $726
Mn, or 33%, of the $2.2 Bn that the sector
attracted in 2021.

Online pharmacy got a big boost in the aftermath

of the pandemic which warranted observing social
distancing and other norms. They made access to
medicines easier in the tough times of Covid and
became an instant hit among consumers. Quick
home delivery and prescription validation from
licensed pharmacists added to their reliability and
credibility.

Healthcare analytics attracted $454 Mn (20.6%),

followed by fitness and wellness at $422 Mn
(19.2%). Medtech received $256 Mn in funding.

Natarajan while pointing out the emergence

speciality investors in healthtech said mega
funding would go to those in the services segment.

The challenge in medtech is the long gestation

period – the long time for creation, testing and
then validation.

Fitness and wellness accounted for the highest

number of funding deals at 33. Healthcare
analytics witnessed 25 deals, while Medtech
closed 23 deals.

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The fitness and wellness segment was buoyed as

preventive healthcare is gaining further
momentum. As more people are taking to yoga
and gym, startups in this space are confident of a
brighter future. “Pharmacy-health hybrid looks very
savvy,” said Natarajan.  

Telemedicine billed as the next big opportunity,

however, recorded a lacklustre year. While it
attracted $132.5 Mn in funding, the number of
deals was high at 16, indicating small deal sizes.
The relatively tepid show by telemedicine segment
comes at a time when the government is
projecting India as a global hub for healthcare
services. The segment is forecast to touch $5.4 Bn
by 2025. 

Going forward a mix of telemedicine, pharma and

generic would probably attract the big-ticket
funding, Natarajan said.

Birth of 4 Unicorns In
Healthtech Space in 2021
Helped by a surge in late-stage funding, four
startups – Innovaccer, Pharmeasy, Curefit and
Pristyn Care – became unicorns during the year.
Late-stage funding rose 3.4x in 2021. As many as
17 had late-stage funding, which was a sharp rise
from five deals in the previous year.

Innovaccer earned the distinction of first

healthtech unicorn, but it took a relatively longer
time frame of seven years for the startup to turn
into a unicorn with a valuation of $1.9 Bn. While it
took Pharmeasy ($1.5 Bn) six years, Pristyn Care
surpassed the $1 Bn valuation mark ($1.3 Bn) in
just three years. Curefit also took five years ($1.5
Bn).

Execution is the play and sustaining the

momentum will be the key, Natarajan said, adding
that it was of course a quick turnaround by Pristyn
Care.

Sequoia, Tiger Global and B Capital Group were

the prominent investors in the healthtech sector in
2021.

Speaking of acquisitions, of the 206 M&As in the

startup world in 2021, the healthtech space
accounted for only 13 of them. While ecommerce
topping the list did not come as a surprise, the
edtech sector beat the fintech segment with 31
deals against the latter’s 25.

Pharmeasy buying out Thyrocare for $600 Mn was

the biggest acquisition in the sector. Tata Digital
buying out 1mg for a reported $230 Mn was
another high-profile acquisition during the year.

The Two Game-Changing Plans

On The Anvil
Going forward, the government’s ambitious digital
health mission and National Health Stack plans
could end up as game-changers for startups in the
healthtech sector. Increased health consciousness
in the aftermath of Covid-19 is another factor that
favours healthtech startups. 

A robust IT framework for healthcare, big data and

digital aggregation of medical records under
national health stack and digital health mission are
just what the doctor has ordered for the healthtech
startups to flourish.

Explore Inc42's 2021 In Review

2021 In Review Funding HealthTech

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