The year 2021 witnessed an exponential rise of venture capital investments in digital health startups. Be it in India or the world, funding in the health tech space saw more than 2x growth compared to 2020. The main reason for this rise is- the increase in health awareness among consumers after the onset of Covid-19.
According to Startup Health insights 2021 year-end report, Healthtech space received a funding of $ 44 billion globally in 2021, double the amount received in 2020. The number of deals increased from 797 in 2020 to 990 in 2021, with an average deal size of $16 Million.
Overall investment in the health-tech space in the US nearly doubled in 2021, according to Rock Health, a venture fund dedicated to digital health. Digital health startups in the US raised $29.1 Billion across 729 deals, the company noted in its year-end funding report.
India’s health tech numbers
India ranks 4th in attracting global health tech investments after the US, China and UK.
Indian digital health startups witnessed a 4.8x growth in funding from $456 million in 2020 to a record level high of $2.2 Billion in 2021. As a result, total funding in Indian digital health startups amounted to $4.7 billion since 2014, making it one among the top 4 countries attracting the highest funding in the health-tech space.
According to Inc 4’s year-end reports, Healthtech funding in India recorded a growth of 61% CAGR in funding amount and 22% CAGR in deal count, making health tech one of the fast-growing sectors in India.
Digital health startups offering online pharmacy services maintained their spot as top money raisers, bringing $726 Million. Healthtech sub-sectors like Healthcare analytics and fitness and wellness raised heavy funding of $454 Million and $422 million, respectively.
Medtech, telemedicine and personal health management also attracted funding from global venture capitalists.
Top funded Indian digital health startups in 2021
PharmEasy, a health tech startup offering telemedicine, medicine delivery and diagnostics services, raised $1.2 billion and became the highest fundraiser in India in 2021. It has also filed an IPO worth $7 Billion, which is expected to launch in the first quarter of 2022.
Cure.fit, a health and fitness startup, has raised $625 million so far. In 2021 alone, the company acquired 7 other health tech startups.
1mg, an online pharmacy, raised $204 Million. In 2021, it was acquired by Tata Digital.
Practo, a mhealth platform connecting doctors and patients, is one of the top-performing health tech startups. It is soon to become a unicorn.
Other health tech startups like Mfine, HealthifyMe, Citius Tech, Medlife, NetMeds, etc., also attracted funding from venture capitalists.
Unicorns and Soonicorns
Four Indian digital health startups became unicorns in a single year. Unicorns are the startups that have raised over $1 Billion in funding.
Indian Health tech unicorns of 2021 are PharmEasy ($1.5 B), Cure.fit ($1.5 B), Innovaccer ($1.3 B), and Pristyn Care ($1.4 B).
Soonicorns are startup companies that are all set to become unicorns soon. Indian digital health startups like Practo, HealthifyMe, Medgenome, mfine etc., became soonicorns this year.
The growth in funding in health tech startups shines a light on the mindset and lifestyle shift COVID has brought around. Consumers now prefer using health tech solutions to keep a track of their activities, get medical advice and also cut down unnecessary waiting time.
Mergers and acquisitions in Healthtech
Indian health tech space also saw many exits in the form of mergers and acquisitions in 2021. A few notable acquisitions are:
- PharmEasy acquired Thyrocare Technologies, India’s first fully automated diagnostic laboratory, for $45.8 M and Aknamed, a healthcare supply chain company, for $144 M.
- Cure.fit acquired 7 health tech startups and became the top health tech startup acquirer of 2021. It acquired Urban Terrain, RPM fitness, OneFitPlus, FITSO, TREAD, Fitternity and Onyx.
- Tata digital acquired 1mg, an online pharmacy, for $160 Million, stating e-pharmacies, e-diagnostics and teleconsultations are the fastest-growing segments in the health tech space.
- Flipkart acquired SastaSundar, a Kolkata based digital pharmacy, to launch Flipkart Health+ and enter the fast-growing online pharmacy market.
- Reliance Retail acquired a majority stake in Netmeds, an online pharmacy.
All these robust mergers and acquisitions stand as testaments to the fast-growing health tech space and the potential it holds for the future.
Top health tech Investors in 2021
Currently, India is the third fastest-growing hub for digital health tech startups. Not only Indian venture capitalists but also global venture capitalists are keen to invest in Indian health tech startups. Some of the active health tech investors of 2021 are
Early-stage investors
- Sequoia Capital
- Innoven Capital
- Khosla Ventures
- Eight Roads Ventures
- Elevation
- Accel
- Currae Health tech fund
Seed-stage investors
- AngelList
- LetsVenture
- Y Combinator
Late-stage investors
- Nexus Venture Partners
- Blume Ventures
- Dream Incubators
- Tiger Global Management
- And many more.
Venture funds like HealthQuad, have launched a venture capital fund of $150 Million in 2021 to fund Healthtech startups in India.
Future projections of Health tech in India and the world
Improvement in healthcare infrastructure, supportive government policies, increase in health awareness among people, evolving business models etc., are the reasons and the effects for the growth of the health tech market.
The digital health market is growing worldwide. While the global digital health market is estimated to grow at 25% CAGR, the Indian health tech market is projected to grow at 39% CAGR. It is estimated to become a $50 billion market by 2033 and create over 40 million jobs.
While the high volume of funding in 2021 is both the cause and effect of bigger shifts in the healthcare space, it is projected to continue in 2022 and beyond.
COVID pandemic became the catalyst for faster development and adoption of digital health solutions. Investment figures in 2021 have dwarfed previous figures and are projected to grow at 28.5% CAGR to reach $650 billion by 2026.
Experts believe that the growth in health-tech investments will continue at full speed not just in 2022 but for the remaining decade and beyond.
