What it would take for India’s healthtech sector to churn out its first unicorn startup

India faces a unique dilemma. On the one hand, the economy of the country is ranked at number 5 in the world, with ambitions to become one of the top three economies in the world by 2025. On the other, its healthcare sector performs poorly at multiple levels, with the country ranking 145 among 195 countries on the Healthcare Access and Quality Index (HAQ). Since independence, the healthcare sector in India has functioned in a very traditional manner. The healthcare infrastructure, therefore, has been plagued by several shortcomings including limited access, inadequate capacity, poor quality care, and limited affordability for the less affluent population. As a result, most of India’s citizens fail to receive quality health care outcomes.

Post-independence, India inherited an impaired economy, with a terrible healthcare infrastructure. Basic healthcare services failed to reach a majority of the population. Though the government made efforts to improve healthcare delivery mechanisms, it was not until the early 80s when the private players started to come up and improve the scenario drastically. With hospitals, labs, clinics, nursing homes mushrooming post the liberalization era, the healthcare services quality has improved tremendously.

With evolving technology and increasing awareness among the masses, the healthcare sector in India has been experiencing an upsurge in the last few years. The healthcare system has been a very conventional system with poor affordability amongst the country’s vast population. The government and citizens at large have increasingly recognized the dire need to improve health care systems.

Health tech startups are usually service-based platforms – and these are finding it difficult to reach unicorn status, due to lower returns than other sectors and longer lead times to get those returns. Healthcare by its business nature is not a very fast-growing business. Unlike e-commerce where huge sales and marketing push can bring in overnight customers. For a healthcare business to establish itself and flourish, it needs to first establish trust and reliability. In healthcare having a healthy level of funding doesn’t ensure customer acquisition overnight. It’s a slow burn process to gain that trust in the Healthcare sector. If we take an analogy of the Chinese bamboo which grows very slowly initially and needs to be nurtured with patience for few years before it starts to grow faster. Any startup in the healthcare sector needs to be treated in the same manner.

Healthcare startups need to first gain trust in the first 5 years of their business operations, go deeper in terms of geographical expansion in the next 5 years, and after the 10th year scale up the business to reach out to a wider base of customers. Startups will be the main driver of facilitating healthcare access to the masses by reducing effort and enhancing convenience. However, even though multiple advantages are provided by healthcare startups, they would need a steady stream of funding to support their ventures.

Currently, innovation and technology development is limited to top health companies. This needs to be democratized through better research facilities and creating a healthcare innovation fund by Govt. to encourage startups to build technology platforms that contribute in terms of meaningful utility in delivering healthcare. While the private sector needs to fulfill the responsibility of being a guide and investor for the development of healthcare startups in India.

The challenge for startups is to minimize user effort in receiving medical care or treatment or be able to prevent illnesses with the use of gadgets, apps, tech platforms, interconnected diagnostic facilities, and hospitals. Innovative ideas that can tap into the big rural markets, tier II, tier III towns where many health campaigns are anyway conducted, will go a long way in building a healthcare unicorn. All that is required is to look in-depth and finding the right gaps in the market to be able to bridge the gaps and provide meaningful benefits.

It’s a known fact that patients are increasingly disgruntled with the services being provided, the doctors are also dissatisfied with the ancillary services being provided to help them better diagnose their patients, hence it’s a perfect opportunity for startups to leverage this situation, inculcate trust, and build successful healthcare brands. If healthcare startups can help patients connect with the right doctors and can increase patient numbers for a doctor along with smoothly managing and enabling a meaningful doctor-patient relationship, the day is not far when by 2025 India will see many unicorns in the healthcare sector.

Financial Express