Healthcare startups struggled to attract fresh funds in 2016
From January to August in 2016, healthcare startups managed to raise only $ 397.41 million. Compared to this, the sector raised $ 1457.75 million in 2015, according to data released by VCCEdge. The number of deals, too, dipped from 144 in 2015 to 88 in 2016 for the same period. Part of the reason for the explosively high amount of funding in 2015 can be attributed to the $ 90 million Series C funding of Practo and the $ 50 million Series A funding for NetMeds. The report further stated that under healthcare startups in 2016, e-health players like online pharmacies and aggregator portals had the highest deal volume, with 35 deals worth $ 50.96 million.
Segments with leading deal value
Furthermore, in terms of deal value, healthcare facilities raised $ 110.9 million from 9 deals, followed by bio-tech startups which raised $ 98.67 million from 4 deals, and healthcare services startups which raked in $ 73.51 million from 20 deals. According to another report by Inc42 datalabs, between the period of 2014 to October 2016, 183 healthcare startups have been funded with a total investment of $ 600 million in the sector.
Bengaluru is the healthcare startup capital in India
Among the Tier I cities, Bengaluru had almost one-third of the total number of healthcare startups followed by Delhi-NCR and Mumbai. Meanwhile, Hyderabad, Pune, Chennai are the upcoming Tier II cities for healthcare market.
Stages of Funding
60% of the deals were seed funds bearing only 7% of the total investment, while Series A rounds had 37% of the investment. Inc42 Datalabs reveals that in 2016, early stage and growth stage (Pre-seed, Seed, Pre-Series A, Series A and Series B) funding has shrunk while the late stage (Series C onwards) ticket size has increased drastically.
The major investors who participated in deals in healthcare are Accel Partners India (9), Sequoia Capital(7), RoundGlass(6), Kalaari Capital(5) and Unitus Seed Fund(5).