Healthcare startups bridge the gap between medical practitioners and patients through new age tools : Dr. Apoorv Sharma, Co-Founder & President, Venture Catalysts
Health-tech start-ups have emerged as a desirable investment domain for investors as the domain offers a radically new approach to solving age-old health sector problems.
Startups are emerging at a very fast pace, and enveloping every spectrum that is present in the market. One of the major spheres wherein startups have rooted deeply is the healthcare sector. They say health is wealth and not only several startups have taken up healthcare as their core agenda but these startups have become the eye candy for several investors. There has been a relatively rise in the investments made by private equities and venture capital firms in the domestic healthcare space. Private Equities and Venture Capital investments stood at of $384 million in 2017-18 and $460 million in 2018-19 fiscal years. The sector is ready to spike investments from the investors this year as well.
In an exclusive interview with Zee Business Dr. Apoorv Ranjan Sharma, Co-Founder & President, Venture Catalysts states reasons why the healthcare sector has become the attractive arena where many startups are venturing. Here is the entire excerpt of the interview,
Q. Why healthcare sector is boosting?
One of the major reasons behind massive growth in this segment is due to the numerous branches its operations extend towards. Core healthcare, insurance, manufacturing new tools, personal care and hygiene, healthcare monitoring, micro-health insurance, and many more. From domestic healthcare space which experienced 69% investment in 2017, the focus has completely shifted towards health-tech start-ups. With the number of dedicated health-tech based accelerator programs and incubators growing, we can expect the prospects of this sector to enhance significantly over the next 5 years.
Q. Why is new age entrepreneur eyeing towards health tech startups sector ?
Health-tech start-ups have emerged as a desirable investment domain for investors as the domain offers a radically new approach to solving age-old health sector problems. Healthcare start-ups are trying to bridge the gap between medical practitioners and patients through new age tools such as smartphone applications or websites, helping reduce operational costs and focusing on overall well-being of every individual. The emergence of several sub-sectors under the healthcare ambit have also contributed to the newfound excitement among investors. Undoubtedly, a huge need gap has always existed in the Indian economy when it comes to healthcare services. However, it is only now, with the emergence of health-tech that entrepreneurs can think about solutions that can impact at a massive scale without compromising on the quality. As a result, higher number of investors are making a beeline towards investment as a domain.
Q. Why investors are eyeing to this sector?
From 2017 to 2018, total investments in the health-tech sector increased from USD 350 million to 470.80 million. In 2019, it has already amassed USD 262.14 million in investments. It is obvious then, that amidst an overall cautious investment landscape, health-tech has emerged as an obvious sunshine segment. Firstly, this is because the prospect of healthcare innovation is always great in high-population countries such as India. The healthcare framework is ill-equipped at such a scale that a feasible, potential business solution finds ready acceptance. The market is huge, and is complemented by favourable regulatory policies including tax benefits. Furthermore, there is a growing healthcare revolution in India, and a growing number of people, both youngsters and elderly alike, are becoming more conscious about their health. In keeping with the global trend, healthy lifestyle has become a national passion, and health-tech businesses catering to this trend are drawing the interest of investors.
Q. How has growth in health insurance startups been so far? What are the tax benefits the customer gains from the insurance?
Currently, health insurance framework in India is not as evolved as it is in some other countries of the world. The biggest hindrance to it is the fact that health insurance still falls under the 18 per cent GST bracket. For more start-ups to participate, the tax needs to be relieved and more benefits need to be provided. The Ayushman Bharat program, one of the world’s largest publicly-funded health insurance schemes, is a step in the right direction. However, the sheer magnitude of the Indian populace needs more independent business participants and unique, innovative product offerings to cater to the canvas fully. In fact, the scheme itself would need a strong infrastructure support to achieve its goal.
(By Ruchika Goswamy)