Healthcare startups struggling to rope in the ‘right investors’

HYDERABAD: Indicating the rising importance of healthcare startups in India, a report has revealed that 6-8% of investments in B2C (business-to-consumer) startups in India are made in the healthcare sector. Despite the buoyancy, the startup domain is struggling to rope in the ‘right investors’ and arrange for adequate funding, which could largely be attributed to the slow pace of growth in the sector.

The report prepared by FICCI - KPMG titled – ‘Indian healthcare start-ups – An inside look into funding’, revealed that it takes anywhere between 10 to 15 years to introduce a new product in the market with very few prevalent business models to compare with.

“Healthcare startups in India are characterized by low levels of funding. In fact they received a sum of only $27 million in the first four months of 2016. During the period 2009-16 (till April), the sector received a cumulative investment of more than $338 million. Startups, with the potential to bridge the significant demand-supply gap in the Indian healthcare system, were able to attract only a small fraction of the overall investments in the healthcare sector,” the report said.

It added that private sector stakeholders could play a crucial role in the growth and development of healthcare startups by investing in high-risk business models, which could enable entrepreneurs to usher in medical advancements.