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Key Trends in India’s Healthcare Startups for 2024

Administrator

2024 presents a unique blend of global upheaval, economic growth in the world’s fastest-expanding economy, and a landmark AI revolution, making it a pivotal year for India’s healthcare startup scene. Our analysis aims to forecast the developments in this sector for the coming year, based on trends from the previous year.

Projections for the next 12 months:

Stagnant Investment Levels in Healthcare

  • Only around 200 healthcare startups were initiated in 2023, offering a limited pool for early-stage investment.
  • With just about 40 Series A/B healthcare startups in India, expect fewer announcements of significant funding rounds in 2024.
  • Total startup investments are likely to hover around the $1 billion mark, with many established startups opting for bridge rounds at reduced valuations due to market shifts.

Rise of GLP1s in India

  • GLP1 weight loss drugs, known for their effectiveness in diabetes management and significant weight loss, are gaining traction.
  • With a market value of INR 300 Cr in India and a 100% annual growth rate, these drugs are expected to become more accessible, especially with Glenmark’s launch of a cost-effective Liraglutide biosimilar.

Increased B2B Startup Adoption in Hospitals

  • Private equity investments in Indian hospitals, which exceeded $4 billion last year, are expected to drive the adoption of technology solutions for operational efficiency, signaling a positive shift for B2B healthcare startups.

D2C Success Stories Setting a New Standard

  • The success of Mamaearth’s IPO and its omnichannel strategy is likely to influence other D2C brands, emphasizing a balance between online presence and traditional retail distribution for profitability and market trust.

Enhanced Diligence in Healthcare AI Investments

  • With rapid advancements in AI, investors are showing keen interest but with caution. The focus is on healthcare-specific models and vernacular language AI solutions tailored for the Indian market.
  • Competition among tech giants is making AI more affordable, benefiting smaller Indian startups.

Continued Expansion in the Hospital Sector

  • The Indian hospital industry, currently at a 20-25x EBITDA multiple, is expected to see further consolidation, M&A, and IPO activities, especially in single-specialty chains.

Government Policies to Boost ABDM Adoption

  • With over 50 crore ABHA IDs created, the government is likely to introduce policies to further encourage the adoption of the Ayushman Bharat Digital Mission (ABDM).

Consolidation and Regulation in the VC Sector

  • The venture capital landscape in India is undergoing changes, with a move towards more discerning, thesis-driven investments. Expect guidelines to emerge for angel networks and syndicate platforms, enhancing investor accountability.

In summary, 2024 is anticipated to be a transformative year for India’s healthcare entrepreneurship ecosystem, with a shift towards more sustainable investment models and innovative solutions in the face of global and local challenges.