With our Prime Minister Narendra Modi ensuring a more liberal regulatory framework for businesses with early stage investments hitting a record high at $5.18 billion (Total investments including PE, VC & Angel investors in India) as against $2.28 billion last year we can expect a flurry of digital startups to enter in the year 2016. To add this, the emergence of many tech startup incubators focusing on healthcare like HealthStart and InnAccel and some dynamic digital startups in India like Practo, Portea Medical, etc has made the health-tech sector blazing hot.
By the year 2017, the Indian healthcare sector alone is estimated to touch $160 billion according to a report published by Equentis Capitals. There are many factors that are responsible for this exponential numbers, like a relative increase in incomes in the sector, more emphasis on health awareness, etc. Globally the healthcare industry is touted to be worth a trillion dollars. Another interesting fact that caught the attention of the tech-market is that according to a report by Emarketer, a leading research and analysis firm states that the world will have a total of staggering 2 billion smartphone users by 2016. In which, India will be leading the technological push by overtaking the US to become the world’s second largest smartphone market with 200+ million users.
Here is our curated list of 3 must know's for entrepreneur’s who want to enter the health tech space.
a) Eminent need for effective payment mechanism…
Besides the fact that an entrepreneur who is entering into the healthcare business needs to understand the paradoxical difference between rural and urban consumer demands there is one key driver that affects the Indian healthcare is the payment mechanism. There is a high out-of-pocket expenditure in the Indian healthcare industry, which means that roughly 70% of consumers pay for their hospital visits and doctors appointments with straight up cash aftercare with no payment arrangements. This is a huge problem that needs to be addressed both via private and technology driven solutions and some serious need of recalibration in the regulatory side.
b) Solve a real challenge, don’t follow
India is home to a massive number of consumers who believe in seeking healthcare solutions via word-of-mouth referral usually by families & relatives. Although, there are many mobile based apps that have risen over the years to break this, but still it’s difficult, even for the current players to make people believe that their health issues can be handled via the internet. There are many healthcare startups that are primarily focussed on ‘booking appointments’ and there are not enough players with tech-driven solutions in the hospitalization space. According to a Mckinsey Report, the domestic hospitalization industry is a total of $280 billion that means there is a huge scope for startups to emerge in the hospitalization space.
c) Start up with an efficient monetization plan…
There are only a few startups in the healthcare space at present, so there are only a few business models that new startups can draw reference from. Remember that this industry deals with a social angle and with a social angle it's usually difficult to monetize, which is also the case with the education sector. Startups which can come up with a great monetizing plan with genuine and large sized pain point to solve will certainly go the long way. To top this the healthcare industry is complex in nature, the government has a lot of rules and regulations and most of the policies are unclear which creates confusion in the segment.
However, a lot of startups in the section are driven and result oriented and there is huge requirement to infuse tech-driven solutions to a variety of other problems in this ecosystem, but we are pleased to say with the current trend in the market finally things are looking up for the health-tech space.