The fledgling online healthcare space is attracting venture capitalists and private equity funds. Consumer healthcare IT service providers such as Practo, HelpingDoc and Lybrate have either raised or are in the process of raising funds to expand their network bases.
The funds raised by each e-healthcare start-ups may not be substantially high, but venture capitalists have begun discovering their potential. Industry officials said an estimated Rs 60 crore ($10 million) could have found its way into the sector over the first eight months of 2014. And with Bangalore-based online e-healthcare platform Practo likely to raise an upward of $15 million, the industry may see an investment of around Rs 150 crore in the segment.
Delhi-based HelpingDoc, a website for booking doctor's appointments, has recently raised funds worth $1.5 million (Rs 10 crore) from Singapore-based Senior Marketing System (SMS). Similar platform, Lybrate is also said to have raised $1.23 million from a venture fund and DocTree, too, secured a funding of Rs 1 crore earlier this year.
Amit Bansal, founder and CEO, HelpingDoc, said, “We have recently raised about Rs 10 crore from a Singapore-based Japanese company called SMS. Earlier, we raised around $0.25 million as seed funding in 2012. Right now, the current fund infusion is sufficient enough to expand our model and we would not be looking at raising more funds in the next 12-18 months.”
The e-healthcare provider, with its network in Delhi and the NCR region, plans to expand into other cities such as Mumbai, Bangalore, Chennai, Kolkata, Pune and Hyderabad. It currently has a base of 4,000-5,000 doctors. The website gets 1 lakh visitor every month of which 3-5% gets translated into actual patients.
Shashank ND, co-founder and CEO, Practo, said, “We have an aggressive expansion plan in place. After India and Singapore, we now want to enter new geographies. In the next 12 months, we would be looking at expanding in other Southeast Asian markets such as Indonesia, Malaysia, Hong Kong and Thailand and also to the Middle East. We will also tap 26 tier II cities in India in the next 12-18 months. For our expansion drive, we would be needing fund and ideally we think we would be raising over $15 million. However, we are yet to finalise on the amount.”
Practo has earlier raised $4 million from Sequoia Capital. The company has 400 employees at present and expects to take that number to 1000 by mid 2015. Practo is also mulling opportunities to bring diagnostics and hospitals on its online platform.
Both Shashank and Bansal said that the space has a lot of potential with majority of the market still being untapped.
“There are 1 million medical practitioners in India but only 2.5% of doctors have been brought on the online platform. Rest 97.5% is yet to be tapped. This leaves immense room for growth. The industry is still at a very nascent stage with an estimated size of about Rs 50 crore at present, but the potential market size is worth Rs 1,000 crore. We are quite optimistic that this sector will have a similar growth as we have seen in the case of the e-commerce business,” said Bansal, adding that till now it is the international VCs who are taking interest to invest in the segment. “The business model is yet to be proven. So, as and when we attain a maturity, I think we will see investments coming from Indian VCs as well,” he added.
The healthcare industry, which was worth $80 billion in 2013-14, is expected to touch $170 billion by 2017. Shashank said, “The e-healthcare industry is getting a lot of traction, thanks to the increase in internet penetration. Around 25% of the entire healthcare industry by 2017 is expected to be powered by e-healthcare segment.”
He also said that big global players such as Zocdoc.com, Practice Fusion and Healthtap are all looking at Asia and India as the next potential market for them to enter.