Indonesian telemedicine and health tech platform Halodoc is in advanced talks to raise $200 million in a Series C round, which it targets to close by end-2020 or early next year, three people familiar with the matter told DealStreetAsia.
Two of the sources said US technology giant Google will be joining the funding round as a new investor.
Halodoc’s CEO and co-founder Jonathan Sudharta, however, declined to divulge details regarding the financing. “We are not able to provide any related information. Currently, Halodoc is focused on helping to overcome the COVID-19 pandemic in Indonesia through various initiatives that we have undertaken,” he said.
A Google spokesperson declined to comment when asked for confirmation about the deal.
On November 2, Halodoc and Google had announced a partnership that draws on artificial intelligence to replicate how junior doctors receive feedback from their senior colleagues.
“We set out to create an easy way to provide feedback in virtual healthcare and worked with Google’s machine learning experts in a late-stage accelerator programme to determine the best approach. With Google’s guidance, Halodoc’s engineers applied natural language processing to Bahasa Indonesia to measure, rank, and provide insights that can inform doctors’ decisions, using thousands of consultations to train their machine learning models,” Sudharta had said in the statement announcing the partnership.
According to the business information platform Crunchbase, 13 investors currently back Halodoc. It has raised a total of $65 million so far from the investors.
In its Series B+ round last year, Halodoc raised $100 million from the Bill & Melinda Gates Foundation, investment insurance firms Allianz X and Prudential Financial, UOB Ventures, Korea Investment Partners, SingTel Innov8, and WuXi App Tec.
Halodoc, founded by Sudharta and Doddy Lukito in 2016, has witnessed a surge in usage this year. In a recent interview with DealStreetAsia, the company said more patients logged on to its telemedicine platform to consult doctors amid the coronavirus outbreak.
This may have brought about a permanent behavioural change as well. “Post pandemic, some things will stay. As an example, people have come to enjoy having a meeting using the Zoom app. I will not be surprised if some medical consultations, too, continue to happen over telemedicine,” Sudharta said.
Besides teleconsultations, Halodoc also offers home deliveries of medicines and online doctor appointments for patients who prefer face-to-face consultations. It was the first health tech platform to run an online COVID-19 ‘self-check’ in March.
Since then, Halodoc’s transaction volumes have jumped 600 per cent. Teleconsultations and home delivery of medicines accounted for 60 per cent of overall transactions, while around 40 per cent came from rapid and SWAB tests — a new revenue stream for Halodoc.
The platform also gained a spike in user numbers during the pandemic. In 2019, Halodoc had 2 million users, mostly from outside Java island. This has grown to 18 million monthly active users currently, with half of the user base on Java island.
Despite the spike in usage, health tech apps still do not have adequate funding streams. Among other hurdles, government policy is not conducive to fundraising in this sector.
Even though the government has provided flexibility in technology-based health services in the pandemic era, there is still a debate on the extent of this flexibility and the implications of the services. Another hurdle is that innovation among health tech players is still absent.
At Indonesia’s VC association forum on Monday, Nicko Widjaja, the CEO of BRI Ventures, state-lender BRI’s investment arm, said that the regulation in the health sector is very rigid, as data related to health is deemed as sensitive.
“The regulation [in the health sector] is more rigid than in the financial [sector]. It is very difficult for health tech to scale the business. Perhaps there should be a sandbox,” Widjaja told journalists.