Singapore-based healthcare investor HealthXCapital says it expects to close up to three more deals by 2020-end as it looks to capitalise on the flurry of opportunities in the healthtech sector amid the COVID-19 crisis.
“We were already looking at a high number of healthtech deals in Southeast Asia since 2018, but the pandemic has added fuel to the fire,” said HealthXCapital partner Seemant Jauhari.
The firm has already made two investments this year, including an undisclosed amount in US-based Breath Diagnostics, and is set to close another one soon.
Closing two more deals this year would make 2020 the most productive year for the Singapore-based firm, which currently has six companies in its portfolio.
The fund focuses on companies with origins in, and impact on, Southeast Asia and India. It has invested in Singapore’s Homage, a tech platform for on-demand healthcare services; India’s Jana Care, a smartphone-based care diagnostics platform; and US-based Praktice.ai, which utilises AI to personalise patient navigation for healthcare organisations.
Jauhari acknowledged that the general sentiment among investors during the pandemic is to “tread with caution”, but claims that as a healthcare investor, he has seen “a flurry of activity on the portfolio side as well as deal volume and quality”.
“Healthtech startups that enable accessibility such as tech-enabled home care services, virtual consultations, chatbots, online pharmacies, etc. have been relatively more resilient during COVID, and some have even benefitted significantly. That said, there have also been casualties where technology deployments have slowed down or been deferred during lockdowns,” he said.
The increased demand for healthtech products and services amid COVID-19 has prompted players in the space to look for additional capital to boost firepower.
Jauhari says he has seen the number of fundraising deals in the market go up significantly in the last two to three months. However, he concedes that pursuing deals now requires more interactions and time due to the restrictions bought about by the pandemic.
Such is the rise in demand surrounding healthcare over the last few months that Jauhari says he has seen a few non-healthcare players wanting to get into this space. For instance, in late February, Malaysian telecom major Celcom forayed into the digital healthcare space by forging a partnership with local healthtech platform DoctorOnCall.
Though a host of startups are trying to enter or expand into the healthtech market in Southeast Asia and India, where HealthXCapital operates, Jauhari says the landscape is still primarily dominated by incumbent players.
India, for instance, has seen several companies receiving investments during COVID-19, such as DocsApp, MediBuddy, ThealthPlix Technologies, and Wellthy Therapeutics. In Southeast Asia, Singapore’s mClinica raised $20 million in April, and Indonesia’s Halodoc is understood to be in the process of raising a significant amount of funding.
On the venture capital side, New Delhi-based HealthQuad raised an initial $21 million for its latest healthcare-focused fund in July. In Singapore, a similar firm is set to be established. Called Straits VC, it has been founded by B Capital general partner Gavin Teo and will focus on early-stage healthcare opportunities in Asia.
HealthXCapital itself is making its bets from its debut fund which targeted a corpus of $25 million when it launched in 2018. Jauhari, however, declined to comment on the status of the fund, which is backed by Apollo Hospitals, Jungle Ventures, Eight Roads Ventures, and private investors.
