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DeborahWeinswig,ManagingDirector,[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

InthisfirstreportinourHealthcareTechStartupsinIndiaseries,welookattheemergingcategoriesinIndia’shealthcarestartupecosystemandnotablestartupsineachcategory.WenotethatthemajorityofstartupsintheIndianhealthcaresectorarefocusedonconvenienceorpreventiveapproachestohealthmanagement.

1) Indianhealthcaretechstartupshadreceived$200millionindisclosedfundingthisyear,asofJuly31.Thatfigureisalreadyaheadofthe$154.8millioninfundingthatIndianhealthcarestartupsreceivedin2016.

2) FivecategoriesinwhichIndianhealthcarestartupsareinnovatingareonlinepharmacyande-commerce;homehealthcare;telemedicine;onlinephysiciandirectories;andhealth,wellnessandlifestylemanagement.

3) Playersinthehomehealthcareandhealth,wellnessandlifestylemanagementcategoriesprimarilytargetmiddle-incomeorhigher-middle-incomeconsumers.

4) StartupsinotherhealthcarecategoriesarelargelyfocusedonthemassmarketandenablingaccesstosectionsoftheIndianpopulationthatareotherwisehardtoreach.

Healthcare Tech Startups in India,

Part 1: Bringing Digital

Health Services to an Underserved,

Dispersed Population

Deborah Weinswig

Managing Director

FGRT

[email protected]

US: 917.655.6790

HK: 852.6119.1779

CN: 86.186.1420.3016

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TableofContentsExecutiveSummary.........................................................................................................................................3

Introduction:HealthcareTechnologyStartupsinIndia....................................................................................4

EmergingCategoriesinIndia’sHealthcareStartupEcosystem.........................................................................41.OnlinePharmacyandE-Commerce..............................................................................................................5

StartupProfile:Netmeds.........................................................................................................................62.HomeHealthcare.........................................................................................................................................6

StartupProfile:PorteaMedical...............................................................................................................73.Telemedicine................................................................................................................................................7

StartupProfile:DoctorInsta...................................................................................................................84.OnlinePhysicianDirectories.........................................................................................................................8

StartupProfile:Practo.............................................................................................................................95.Health,WellnessandLifestyleManagement...............................................................................................9

StartupProfile:GrowFit.......................................................................................................................10WrappingUp..................................................................................................................................................11

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ExecutiveSummaryIndia’seconomyisgrowingrapidly,buttherearemanychallengesthatarehinderingprogressinvarioussectors,includinghealthcare.ThishasledtoariseinthenumberofstartupsseekingtocreatesolutionsforIndia’suniquehealthcaresectorproblems.

AccordingtodatafromIndianbusinessblogandstartuptrackerTrak.in,Indianhealthcaretechstartupshadreceived$200millionindisclosedfundingthisyearasofJuly31.Thatfigureisupfromtotalfundingof$154.8millionin2016,accordingtostartupplatformYourStory.

MostIndianhealthcarestartupsareinnovatinginoneoffivecategories:

1. Onlinepharmacyande-commerce

2. Homehealthcare

3. Telemedicine

4. Onlinephysiciandirectories

5. Health,wellnessandlifestylemanagement

Whileplayersinthehomehealthcareandhealth,wellnessandlifestylemanagementcategoriesprimarilytargetmiddle-incomeorhigher-middle-incomeconsumers,startupsinothercategoriesarelargelyfocusedonthemassmarketandenablingaccesstosectionsofthepopulationthatareotherwisehardtoreach.

Source:iStockphoto

Indianhealthcaretechstartupshadreceived$200millionindisclosedfundingthisyearasofJuly31,upfrom$154.8millioninallof2016.

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Introduction:HealthcareTechnologyStartupsinIndiaAcommongoalformanygovernments,healthcareprovidersandhumanitarianorganizationsaroundtheworldistoprovideaffordablehealthcareforthoseinneedofit.India’sgovernmentandhealthcarestartupsectorsharethisgoalaswell,andtherearemanypromisinghomegrownstartupsthathavecreatedcutting-edgesolutionstohelpbridgethegapsintheIndianhealthcaresupplychain.

Source:iStockphoto

InthisfirstreportinourHealthcareTechStartupsinIndiaseries,welookattheemergingcategoriesinIndia’shealthcarestartupecosystemandnotablestartupsineachcategory.WenotethatthemajorityofstartupsintheIndianhealthcaresectorarefocusedonconvenienceorpreventiveapproachestohealthmanagement.

Insubsequentreports,weexploresomeofthechallengesthatareuniquetoIndia’shealthcaresector.WealsolookathowIndiacompareswithsomeofitsAsianpeers,itsBRICcohortsandothermajoreconomies,andexplorewhatitcanlearnfromthemintermsofdispensinghealthcare.

EmergingCategoriesinIndia’sHealthcareStartupEcosystemAccordingtodatafromTrak.in,Indianhealthcaretechstartupshadreceived$200millionindisclosedfundingthisyearasofJuly31.Thatfigureisalreadyaheadofthe$154.8millioninfundingthatIndianhealthcarestartupsreceivedin2016,asestimatedbystartuptrackerYourStory.

India’ssuccessfulhealthcarestartupshavegainedstrongfootingthankstothedisruptiveproductsandservicestheyhavebuilt.Thesebusinesseshaveconnectedconsumerswithprovidersinwaysthatwerepreviouslyunexploredorunviableduetoalackofawarenessandanabsenceofsufficienttechnology.Below,weexaminethetopfivecategoriesinwhichIndianhealthcarestartupsareinnovating:

1. Onlinepharmacyande-commerce

2. Homehealthcare

3. Telemedicine

4. Onlinephysiciandirectories

Inthisreport,welookattheemergingcategoriesinIndia’shealthcarestartupecosystemandnotablestartupsineachcategory.

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5. Health,wellnessandlifestylemanagement

ThetablebelowlistssomeofthehealthcarestartupsthathavegeneratedinnovativesolutionstoIndia’suniqueneeds.

Figure1.India:Top10HealthcareStartups,byFundingReceivedYeartoDateasofJuly31,2017

Startup Category Headquarters Investors Amount(USDMil.)

Practo Onlinehealthcareplatform

Bangalore Tencent,ru-Net,RSIFund,ThriveCapital $55.0

HealthCareatHome(HCAH)

Homehealthcareprovider

Noida QuadriaCapitalAdvisors $40.0

MedwellVentures

Homehealthcareprovider

Bangalore MahindraPartners,EightRoadsVentures,F-PrimeCapitalPartners

$21.0

iGeneticDiagnostics

Healthdiagnosticsolutions

Mumbai CDCGroup $19.5

PharmEasy Onlinepharmacy Mumbai BessemerVenturePartners,OriosVenturePartners,TrifectaCapital

$18.0

1mg Onlinepharmacy Gurgaon HBMHealthcareInvestments,MaverickCapitalVentures,SequoiaIndia,OmidyarNetwork,KaeCapital

$15.0

SigTuple Medicalautomationplatform

Bangalore AccelPartners,IDGVentures,EndiyaPartners,piVentures,VHCapital,AxilorPartners

$5.8

SastaSundar Onlinepharmacy Kolkata RohtoPharmaceutical $5.0

GrowFit Healthtechplatform Bangalore ManipalEducationandMedicalGroup(MEMG),SARGroup,TheGroverTrust

$4.5

CollateralMedical

Onlinemedicalequipmentsupplier

Mumbai CarpediemCapital $3.5

Source:Trak.in

1.OnlinePharmacyandE-CommerceTheIndianpharmacyretailmarketwasworthsome$15billionin2015andIndiansecuritiescompanyMicrosecFinancialServicespredictsitwillgrowataCAGRof14%to2020.Themarketisheavilyfragmented,withnumeroussmallpharmacies,mostofwhichareconcentratedinurbanareas.OnlineretailformsonlyatinypartoftheIndianpharmacymarket.In2016,onlinepharmaciesinthecountryreceivedabout$28.5millioninfunding,downfrom$62.2millionin2015,accordingtostartupdataaggregatorTracxn.

KeydriversforonlinepharmaciesinIndiaarethedearthofpharmaciesinruralareasandtier-2andtier-3cities,andtherelativeunavailabilityofmedicinesandmedicalproductsatphysicalstores.

ThreeofthemosthighlyfundedstartupsinthiscategoryareNetmeds,whichweprofilebelow,1mgandPharmEasy.

TheIndianpharmacyretailmarketwasworthsome$15billionin2015andisexpectedtogrowataCAGRof14%to2020.

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StartupProfile:Netmeds

Source:Netmeds.com

Businessbrief:Netmedsisanonlinepharmacythatsellsprescriptionmedicinesaswellasover-the-counterdrugs.

Competitiveadvantage:NetmedswasoneofthefirstonlinepharmaciestobeestablishedinIndia,andthough1mg,acompetingstartup,beganoperatingafewmonthsearlier,Netmedsmanagedtosecureahigheramountoffunding($50million)earlyon.1mg’stotalfundingsofar,acrossfiverounds,hasamountedtoonly$47million.

Traction:InFebruary2017,NetmedsfounderPradeepDadhatoldtheBusinessStandardnewspaperthatNetmedswillexpandoperations,movingfromservingretailcustomersonlytoalsowholesalingtopharmacieslaterthisyear.DadhaalsomentionedthatNetmedswillservemoresmallercitiesthroughtheyear.

Funding:Netmedshasundertakenonlyasingleroundoffundingsofar—$50millioninOctober2015.

2.HomeHealthcareInIndia,thehomehealthcaremarket—whichconsistsofhealthcareservicesthatareprovidedwithintheconsumer’shome—wasworthanestimated$4.1billionin2016,accordingtoconsultancyfirmRedSeer.ThefirmexpectsthemarkettogrowataCAGRof40%to2018,to$8.1billion.

KeydriversinthiscategoryareIndia’sgrowingagingpopulation,consumers’increaseddisposableincomesandaculturalshiftthatisresultinginfewerjointfamiliesresidingtogetherinasinglehome.

PorteaMedicalisoneofthemostheavilyfundedstartupsinthiscategory.OthernotablenamesareHealthCareatHome(HCAH)andMedwellVentures.

ThehomehealthcaremarketinIndiawasworthanestimated$4.1billionin2016.

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StartupProfile:PorteaMedical

Source:Portea.com

Businessbrief:PorteaMedicalprovidesin-homemedicalservicesacross16citiesinIndia.Ithasabout4,500staff,includingphysiotherapists,nursingattendants,nursesanddoctors,whoundertakeatleast100,000homevisitspermonth.PorteaMedicalprovidesgeriatriccare,postoperativecare,palliativecareandphysiotherapy.Italsocollectslabsamplesfrompatients’homesfordiagnosticanalysisandrentsoutmedicalequipmentnecessaryforin-homecare.

Competitiveadvantage:PorteaMedicalhasafirst-moveradvantageandhasbuiltitsbrandinthissegment.ItispartofanentrepreneurshipplatformcalledGrowthStorythatfoundsandmentorsstartups,severalofwhichhaveturnedintosuccessfulventures.

Traction:Apartfromsteadilyexpandingitsofferingandavailabilityinmorecities,PorteaMedicalhasbeenmakingstrategicacquisitionsandinvestmentsinhealthcaretech.

Funding:PorteaMedicalhasraised$46.5millionsofarfromVentureast,QualcommVentures,InternationalFinanceCorporationandAccelPartners.FounderMeenaGaneshtoldreportersrecentlythatPorteaMedicalhopestoraisesome$25millionthisyear.

3.TelemedicineTelemedicineistheremotediagnosisandtreatmentofpatientsviaphoneortheInternet.TheIndiantelemedicinemarketwasworthabout$15millionin2016,accordingtotheAssociatedChambersofCommerceandIndustryofIndia(ASSOCHAM).ThetradeassociationestimatesthatthemarketwillgrowataCAGRof20%to2020,to$32million.

KeydriversfortelemedicineinIndiaareamajorityruralpopulationwithlittleornoaccesstoprimaryhealthcareandarelativeshortageofdoctorsandspecialists.

TopstartupsinthiscategoryincludeDoctorInstaandPracto.

TheIndiantelemedicinemarketwasworthabout$15millionin2016.

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StartupProfile:DoctorInsta

Source:DoctorInsta.com

Businessbrief:DoctorInstaenablespatientstohaveonlineconsultationswithdoctorsthroughitswebsiteandsmartphoneapp.

Marketopportunity:AmajorityofIndia’spopulationlivesinsmallercitiesandtownsthatmaynothaveaclinicoraspecialistdoctoravailablenearby.Telemedicinehelpspatientsinunderservedareasinstantlyconnectwithadoctortrainedinaparticularspecialty.

Competitiveadvantage:DoctorInstaprovidesonlytele-consultations.Itsbusinessmodelincludesrepresentativesworkinginvillagesthathelppatientsusetabletsandphonestoconsultwithdoctorsonline.OneofDoctorInsta’sinnovations,calledHealthATM,isaunitcomprisingascreenforvirtualconsultationandanetworkofhealthInternetofThings(IoT)devices.PatientscanwalkintoaHealthATMandhavesomeoftheirvitalsigns(suchasbloodpressure,heartrateandbloodsugarlevels)measured.Userscanalsoconsultdoctorsthroughthescreens.

Traction:DoctorInstawasestablishedinDecember2015andisstillintheearlystagesofgrowth.CEOAmitMunjaltoldnewspaperTheEconomicTimesinJune2017thatDoctorInstahopestocapture2%oftheIndianprimarycareconsultationsmarketintwoyears,whichtranslatestoamillionconsultationsperday.WhileallofDoctorInsta’scurrentcustomersarefromIndia,thecompanyhopestoexpandtootheremergingmarketssuchasBrunei,Nepal,BangladeshandthePhilippineslaterthisyear.

Financials:DoctorInstabeganwithseedfundingof$500,000andreceived$2.5millionfromUS-basedinvestorsRoundGlassPartnersandBrahmaXVentures.

4.OnlinePhysicianDirectoriesTherearemorethan900,000doctorsinIndia,butnosingle,comprehensiveonlinedatabasegroupsthembylocationandspecialty.Manydoctorsandclinicsarenotlistedonlineatall,andbookingappointmentswiththosethatdouseanappointment-bookingsystemisusuallydoneviatelephone.Atmostclinics,patientssimplyqueueupandarethenattendedtointurn.

Keydriversinthissectorareanincreasingonlinepopulationanddoctors’needforhighervisibility.

TopstartupsinthiscategoryarePractoandLybrate.

Therearemorethan900,000doctorsinIndia,butnosingle,comprehensiveonlinedatabasegroupsthembylocationandspecialty.

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StartupProfile:Practo

Source:Practo.com

Businessbrief:Practoofferstwoproducts,asubscription-basedpractice-managementsoftwaresolutionfordoctorsandclinicsandawebsitethatlistsdoctorsalongwiththeircontactdetailsandabriefprofileoftheirspecialtyandprofessionalexperience.Onthewebsite,patientscanlookupdoctorsbylocationandspecialtyandbookappointmentswiththem.Practoalsoallowspatientstoconsultwithdoctorsonlinethroughitswebsiteandapp,andordermedicinesonlineforhomedelivery.

Marketopportunity:AlargenumberofdoctorsinIndiaarenotlistedinanyonlinedatabaseanddonothaveasystemofmaintainingmedicalrecordselectronically.Practohopestosolvetheseproblemsandmakedoctorsmorevisibleandaccessible.

Competitiveadvantage:ThereareafewotherdatabasesthatlistIndiandoctors,butnoneappearstobeascomprehensiveasPracto’s.Practoalsooffersauser-friendlydesignandinterface.

Traction:Practosaysthatitfacilitatesmorethan50millionappointmentseveryyear(upfromthe7millionthatYourStoryreportedinAugust2014).ApartfromIndia,thepatient-facingwebsiteisavailableinBrazil,Indonesia,thePhilippinesandSingapore.Thedoctor-facingpracticemanagementsoftwareisavailablein10additionalcountries.

Funding:Practohasbeenthroughfourfundingrounds.Itraised$4millioninseriesAfundingin2012,accordingtostartupdatabaseCrunchbase.com.In2015,itraisedaseriesBroundof$30millionfromtwoinvestorsandaseriesCroundof$90millionfromseveninvestors.Initslatestround,itraised$55millionfromnineinvestors.

5.Health,WellnessandLifestyleManagementTheFederationofIndianChambersofCommerceandIndustry(FICCI)estimatedthattheIndianwellnesssectorwasworth$13.3billionin2015.Theorganization’sdefinitionofthewellnessmarketinIndiaincludedbeautyandpersonalcare,nutritionservices,fitnesscenters,andalternativetreatmentsandtherapy.FICCIexpectsthemarkettogrowataCAGRof12%,to$26.3billion,by2020.

Keydriversinthissectorarethelifestylediseasesthatareresultingfromconsumers’increasinglybusylives,growingawarenessofhealthcare

TheIndianwellnesssectorwasestimatedtobeworth$13.3billionin2015.

ManydoctorsinIndiaarenotlistedinanyonlinedatabaseanddonothaveasystemofmaintainingmedicalrecordselectronically.

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management,risingaffluenceandanincreasingcostburdenonthehealthcaresystem.

TopstartupsinthissegmentincludeGrowFit,Cure.FitandGympik.

StartupProfile:GrowFit

Source:GetGrowFit.com

Businessbrief:GrowFitisahealthandwellnesscompanythatprovidesadviceandcounselingonvariousaspectsofwellnessthroughitswebsiteandapp.GrowFitalsosellspackagedfoods—includingbreakfastitems,healthymixes,snacksandbeverages—andmealplansthatincludefreshfoodinthreepackages—theWholeGrainOfficeLunch,theStayFitDietandtheLeanMachineDiet.Consumerscanbuythesethroughasubscriptionprogram,basedontheirhealthneedsandfitnesslevels.

Competitiveadvantage:GrowFitisoneofthefewstartupsintheIndianhealthandwellnesssegmentthatenjoyshighvisibility.ItispartofGrowthStory,awell-reputedentrepreneurshipplatformthathasfoundedandmentoredseveralsuccessfulstartupsinIndia.Dr.RanjanPai,theCEOofManipalEducationandMedicalGroup(MEMG),isonthecompany’sboardofdirectors.MEMGistheprivateequityarmoftheManipalHospitalsgroup—oneofthetophospitalchainsinIndia.GrowFitusesacombinationofdatascience,medicalscienceandbehavioralinsightstocreatewell-researched,personalizedmealandfitnessplansforeachcustomer.

Traction:GrowFithasapproximately25,000customersforitspackagedfoodandmealplans,anditscustomerbasehasregisteredgrowthof30%everymonth.GrowFit’sfreshfoodplansarecurrentlyavailableonlytocustomersinBangalore,butwillbeavailableintwomorecitiesinthenextsixmonths.Thecompany’spackagedfoodsareavailableforpurchaseacrossthecountry.

GrowFit’schatservicessubscriptionrevenuehasbeendoublingeverymonthandfoodsubscriptionordershavegrownbyfivetimessinceMarch2017.Some60%oftheappusersarefromtier-2andtier-3citiesinIndia,andmorethan1,000chatsessionsareheldeveryday.Sofar,some200,000dietchartshavebeensharedandGrowFit’scustomershavelostover90,000kilograms(198,000lbs)intotal.

GrowFitintendstousethefundsitrecentlyraisedtoexpandto10morecitiesacrossIndia.

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Funding:GrowFithasraised$4.5millioninseriesAfundingandisoneofthetop-fundedIndianhealthtechstartupsinitscategorysofarthisyear.

Mostofthesehealthcarestartups’solutionsarepositionedtobeaffordabletolower-andmiddle-incomeconsumersinIndia.Forexample,anyonewithasmartphonecanuseittoconsultwithdoctorsthroughtelemedicineappsorbookappointmentswithdoctorsintheirneighborhood,andthosewiththeabilitytoaffordmedicinescanbuythemthroughtheonlinepharmacies.

WrappingUpServicesthataremorenicheinnature,suchasthoseprovidedbyPorteaMedical,arepositionedforIndianconsumersinmiddle-incomeorhigher-middle-incomebrackets.GrowFitisalsotargetedtowardconsumersintheseincomegroups,butspecificallythosewho“havedonetheirhomework”—meaning,informedconsumerswithspecificresultstheywishtoachievebyusingGrowFit’soffering.

Butplayersintheonlinepharmacy,telemedicineandonlinephysiciandirectorycategoriesmainlytargetthemassmarketandenableaccesstounderservedsectionsoftheIndianpopulation.

HealthcareexpenditureinIndiahasbeengrowingsignificantly,butthesectorisvastandremainslargelyunorganized.Lookforournextreportinthisseries,inwhichwediscussthesizeandscaleoftheIndianhealthcaresector,identifythekeycharacteristicsofIndia’sconsumerhealthcareindustry,andexaminewhattheIndiangovernmentisdoingtodevelopthehealthcaresector.

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DeborahWeinswig,CPAManagingDirectorFGRTNewYork:917.655.6790HongKong:852.6119.1779China:86.186.1420.3016deborahweinswig@fung1937.comSwaroopraniMuralidharResearchAssistant

HongKong:2ndFloor,HongKongSpinnersIndustrialBuildingPhase1&2800CheungShaWanRoad,KowloonHongKongTel:85223004406London:242-246MaryleboneRoadLondon,NW16JQUnitedKingdomTel:44(0)2076168988NewYork:1359Broadway,18thFloorNewYork,NY10018Tel:6468397017FungGlobalRetailTech.com