India’s healthcare industry is in the middle of a major transformation, and investors are all in.
The sector pulled in a massive $14.5 billion in private equity (PE) and venture capital (VC) since 2020. And nearly 58% of that came in just the last two years (2023-2024), according to a recent report by Ernst Young (EY) and the Indian Venture and Alternate Capital Association (IVCA).
The numbers in the report clearly indicate the growing investor appetite for India’s healthcare. Confidence is sky-high, momentum is accelerating, and the sector has become a magnet for serious capital.
But beyond the big figures, the report dives deep into where the money is flowing, which segments are stealing the spotlight, and what’s really driving this investment frenzy.
Let’s unpack it.
A post-pandemic investment boom
COVID-19 didn’t just change how we look at health, it completely reshaped the healthcare industry. It created explosive growth in the need for clinical services, medical equipment, and holistic wellness offerings.
This shift didn’t just catch the public’s attention—it also drew significant interest from private equity and venture capital investors looking to back innovative healthcare advancements.
Over the past five years (2020 to March 2025), PE/VC funds have been pouring money into healthcare, driven by rising wellness awareness, evolving medical needs, and the sector’s natural resilience.
But there is nuance beneath the boom. Vivek Soni, Partner and National Leader for Private Equity Services at EY, notes:
“Q1 2025 recorded $13.7 billion in PE/VC investments—14% lower than Q1 2024 and 2% below Q4 2024. Deal volume also dipped, with 20% fewer transactions year-on-year.”
This short-term cooling suggests that while long-term confidence remains rock-solid, investors are getting more selective with their bets.
Where’s the money flowing?
No surprises here: hospitals and clinics are leading the charge, scooping up 60% of all healthcare PE/VC investments. With healthtech right behind.
These big-ticket businesses need hefty funding to expand and streamline, making them ideal for long-term PE strategies focused on scaling up and cashing out.
And the strategy is working. The exit numbers in the report back it up.
Healthtech is also riding a fresh wave of investor enthusiasm with AI-driven diagnostics, telemedicine, and wearable health monitors. These are tools that empower patients and give doctors smarter insights.
Since 2020, healthtech startups have raised $1.9 billion across 143 deals, outpacing other segments. The message is clear: digital health is where the future of medicine lies.
Growth and buyout funding dominate
Regarding investment stages, the report shows that most PE/VC money in healthcare went into growth funding and buyouts.
During Q1 2025, buyout investments led the charge with US$5.2 billion, followed by growth investments at US$3.1 billion.
This indicates investors are doubling down on scaling proven businesses and consolidating strong players to dominate the market.
Lucrative exits driven by hospitals and clinics
Between 2020 and now, the report shows healthcare sector exits have reached a whopping $8.8 billion. A massive 76% of that came from the hospital and clinic segment.
This aligns perfectly with the sector’s investment focus and highlights the success of scaling and efficiency-driven strategies.
Some standout deals from the report include:
- KKR’s stake sales in Max Healthcare Institute
- Temasek’s increased stake in Manipal Health Enterprises
- KKR’s buyout of Healthium Medtech
These exits are not just profitable. They reinforce why India’s healthcare market is so attractive to global investors.
Key drivers behind investor confidence
So, what is fueling this surge in investor interest in India’s healthcare sector?
An under-penetrated market with huge potential
India’s healthcare sector is far from saturated. With the market expected to reach $638 billion by 2025, the room for growth is massive. Rising demand for quality care and greater health awareness are opening up new opportunities that investors can capitalise on.
Resilient demand, regardless of economic swings
Healthcare isn’t a luxury, it is a necessity. Whether the economy is up or down, people still need hospitals, diagnostics, and medical devices.
This stability makes healthcare a safer, long-term bet, especially compared to sectors that rise and fall with consumer spending.
Tech-driven transformation
From AI-powered diagnostics to telemedicine platforms, innovative healthtech startups are reshaping how care is delivered, and investors are taking notice.
The potential for tech to boost efficiency and improve patient outcomes is drawing a new wave of funding into this space.
A supportive regulatory backdrop
While not spelt out explicitly, it is clear that favourable policies and government efforts to strengthen healthcare infrastructure are also boosting investor optimism. A stable regulatory environment always helps, and India seems to be moving in the right direction.
Together, these factors are creating a perfect storm of opportunity, and investors are eager to get in on the action.
More growth on the horizon
The EY-IVCA report concludes with an optimistic outlook, anticipating the continued growth of PE/VC investment in the Indian healthcare sector.
The pandemic may have kick-started this wave, but rising wellness consciousness and tech-driven solutions are expected to sustain it.
In particular, startups and digital health platforms will remain in focus as the sector evolves.
Spotlight on key investment and exit deals
The report spotlights some standout deals that capture what is happening in the market:
- Temasek & TPG investing in Manipal Health Enterprises
- KKR’s acquisition of Healthium Medtech
- Blackstone’s fresh capital infusion into CARE Hospitals
On the exit side:
- KKR’s partial exit from Max Healthcare
- Temasek’s strategic buy-in at Manipal Hospitals
Each of these deals tells a story of a market in transformation and investors capitalising on that shift.
Why EY & IVCA insights matter
When it comes to understanding India’s investment landscape, few sources are as credible as EY and IVCA. EY brings global expertise and data-driven analysis, while IVCA offers an insider’s view from the heart of India’s PE/VC ecosystem.
Together, their reports provide not just numbers, but actionable insights that serious investors rely on. They track real deals and trends, not guesswork. Their reputations hinge on accuracy by blending big-picture context with local nuances.
In short: When EY and IVCA speak, investors listen.
Conclusion: A healthy outlook for healthtech investment
The EY-IVCA report paints a clear picture: India’s healthcare sector is booming, and it’s not a short-term spike.
With a blend of strong demand, digital innovation, and investor-friendly dynamics, the sector is primed for sustained growth. Hospitals and healthtech startups are leading the charge, offering investors the perfect mix of high returns and long-term impact.
For PE/VC players, this is a rare opportunity to be part of a sector that’s transforming how healthcare works in one of the world’s most dynamic markets.
To conclude: India’s healthcare sector isn’t just on the radar, it’s centre stage.
-By Alkama Sohail and the AHT team
