COVID has set the ball rolling for SEA’s telemedicine startups, but where are they headed?

Photo: Getty Images Pro via DealStreetAsia

Telemedicine in Southeast Asia is having its moment.

Spurred by the pandemic, millions of patients in the region took up remote consultations through video or telephone this year, to avoid potentially infectious hospitals; many also took to ordering their medicines online amid the lockdown.

The result has been a boom-year for telemedicine platforms.

Players such as Indonesia’s Halodoc, which provides teleconsultation and e-pharmacy services; Malaysia’s BookDoc, a booking and consultation app; and Singapore’s MyDoc, a B2B2C digital health app that provides teleconsultation for corporate clients, have seen user adoption soar in 2020.

Yet, as the high noon of the pandemic recedes in most parts of Southeast Asia, challenges to further growth are emerging— regulation, lack of user awareness, monetisation, and data security, among others. Telemedicine platforms may, therefore, have to look at M&As and other consolidation opportunities to sustain the momentum.

But, for now, the ball has been set rolling.

Spike in usage

According to a recent report jointly published by Google, Temasek, and Bain & Co, COVID-19 has accelerated commercial interest in telemedicine. To capitalise on the opportunity, health providers, payers, and other businesses like banks, have built their own platforms or partnered with existing telemedicine providers.

Across Southeast Asia, this has materialised in several forms including the aggregation of smaller hospitals and clinics on a few telemedicine platforms, the Google-Temasek report noted. Some telemedicine startups have also established partnerships with ride-hailing platforms, for COVID-19 testing and screening, and with insurance companies, to increase healthcare coverage. The telemedicine players have also teamed up with large hospital groups to provide healthcare access and COVID-19 advisory.

Monthly active users on telemedicine platforms jumped more than four times in some months this year, compared with January 2020, the report titled “e-Conomy SEA 2020 — at full velocity: Resilient and racing ahead” showed.

Source: AppAnnie; SEA data comprises of both iOS and Google Play

Startups DealStreetAsia spoke to also reported a surge in usage.

BookDoc, for instance, has clocked a three-figure percentage increase in doctor appointment bookings and teleconsultations on its app in the last 10 months. This was accompanied by a six-digit increase in the number of downloads of the app in 2020, said a spokesperson.

For MyDoc, the number of daily active users grew 147 per cent year-on-year in Q1 2020. The number of clients registered on the B2B platform also rose four times, compared with the beginning of the year. The clients include medical providers looking to digitalise their services, doctors looking for telehealth training, and businesses looking to provide telehealth benefits to employees.

“As a result of the global increase in demand, our platform is now being used in the US, the UK and is about to go live in the UAE too,” said Melisa Teoh, MyDoc’s general manager and chief marketing officer.

For Halodoc, the growth is even higher with 18 million monthly active users added since the COVID-19 outbreak around March, marking a nine-fold increase from 2019’s two million monthly active users.

Doctor Raksa, a Thailand-based telemedicine platform backed by Bangkok’s Bumrungrad International Hospital, noted that the adoption of services in the first quarter 2020 grew 3-6 times from the same period in 2019, according to a report by Bangkok Post. Meanwhile, Ooca, an online psychological consultation service provider in Thailand, witnessed a weekly 20 per cent growth in usage in March this year.

“Even before the pandemic, rising interest in preventive health, and rapidly-expanding internet penetration across the [Southeast Asian] region led to a higher uptake in digital health solutions — a trend that has exponentially accelerated with the pandemic,” said Mervin Teo, vice president, Quadria Capital, a healthcare-focused PE firm.

Another factor catalysing the adoption of telemedicine is favourable regulatory action. Southeast Asian governments have ratified various regulations allowing digital health platforms to offer their services.

“Governments across the region took steps to facilitate access to, and increase the adoption of, qualified digital health solutions such as telemedicine and remote monitoring… from a regulatory support perspective, COVID helped the digital health ecosystem. Having said that, each country within the region has different rules around what’s allowed and is reimbursable, with some more advanced in their digital health journey versus others” said Aakash Swaroop, director, MUFG Bank.

Expand Table

SEA Telemedicine Regulations

CountryTelemedicine regulations related to COVID-19
IndonesiaMinistry of Health issued Circular Letter No. HK.02.01/MENKES/303/2020 concerning the Organization of Health Services through the Utilization of Information and Communication Technology to Prevent the Spreading of Corona Virus 2019 Disease (COVID-19) in April 2020.
MalaysiaThe Malaysian Medical Council publishes advisory on virtual consultation (during the Covid19 pandemic), guided by the Medical Act 1971 (Amended 2012)
SingaporeNo single regulatory framework for telemedicine. Ministry of Health intends to issue new Healthcare Services Act (HCSA) to update the regulatory framework and requirements, that is expected to be implemented in phases from 2021 to 2022.
PhilippinesThe Department of Health developed guidelines for physicians and patients to use telemedicine for consultation in COVID-19 and FDA Circular No. 2020-007, which provides guidelines for the issuance of e-prescriptions.
ThailandMedical Council of Thailand issued the Notification of the Medical Council on Guideline in respect of Telemedicine and Online Clinics No. 54/2563 dated 21 July 2020.
VietnamThe Ministry of Information and Communications coordinates with the Ministry of Health launched a telemedicine programme in April 2020, through a pilot programme at the Hanoi Medical University Hospital.
Compiled by DealStreetAsia

Adoption to continue

The acceleration in Southeast Asia’s digital health, witnessed in 2020, is expected to continue, say experts.

“Digital solutions will play a much larger role in the future. It’s not a theoretical discussion anymore that we’ve had for many years in many countries, about the virtue of telemedicine,” said Carl Stanifer, operating partner of Dubai-based specialist healthcare investment firm TVM Capital Healthcare.

With a rapidly ageing population and increasing prevalence of chronic diseases, digital health will play an important role. “There is a need for better health outcomes at lower costs, compared to most systems today,” said MyDoc’s Teoh. Telehealth platforms can help both doctors and patients monitor the situation closely, she added.

“Even next year, depending on the pandemic’s status and personal preferences, people would prefer remote consultations over going to the hospital, [especially] for sub-acute indications and continued chronic-care. These sort of adoptions will be sticky for various reasons, not only among patients but also among service providers” said MUFG’s Swaroop.

And, hereinafter, there will be a lot of companies to fund, he added.

According to the Google-Temasek report, there was around $220 million worth of investments into Southeast Asia’s healthtech platforms in the first half of 2020, across 50 deals.

In telemedicine platforms, there was at least $31.2 millions worth of funding since early 2020, according to data compiled by DealStreetAsia and Tracxn. The biggest fundraising this year was by Singapore-based DoctorAnywhere — $27 million in a Series B round in March 2020.

Expand Table

Funding DateRound NameFunding Amount (US$)Company NameLead InvestorFounded YearLocation
November 13, 2020Series C+UndisclosedAlodokterMDI Ventures2014Indonesia
Jul 14, 2020Seed600,000MyancareSPARX Group2017Myanmar
April 27, 2020Pre-Series A2.5 millionBuyMed (Thuocsi.vn)Sequoia Capital India’s Surge, Genesia Ventures, Cocoon Capital 2018Vietnam
April 24, 2020Pre-Series A1.1 millionNaluriDuopharma Biotech Berhad, M Venture Partners, RHL VenturesMalaysia
Apr 01, 2020SeedUndisclosedEDoctorCyberAgent Capital
Genesia Ventures
BonAngels Venture Partners
Nextrans
2014Vietnam
Mar 31, 2020Series B27 millionDoctor AnywhereSquare Peg
EDBI
IHH Healthcare Berhad
2015Singapore
Nov 25, 2019SeedUndisclosedG-MEDS500 Durians
500 TukTuks
2015Singapore
Oct 31, 2019Seed2.4 millionChild Health ImprintsHealthXCapital2018Singapore
Oct 16, 2019Series C33 millionAlodokterSequis Life, Philips, Heritas Capital, Hera Capital, Dayli Partners2014Indonesia
Sep 26, 2019Seed 500,000BuyMed (Thuocsi.vn)Cocoon Capital, VietCapital Ventures2018Vietnam
August 6, 2019Series B13 millionDocDocAdamas Finance Asia2012Singapore
April 1, 2019Series A5 million Jio HealthMonk's Hill Ventures2014Vietnam
March 4, 2019Series B65 millionHalodocUOB Venture Management2016Indonesia
Jul 02, 2018Series A4.1 millionDoctor Anywhere2015Singapore
Mar 20, 2018Series B5.45 millionDocDocAdamas Finance Asia2012Singapore
Jan 03, 2018SeedUndisclosedWEB Biotech2009Singapore
Source: Tracxn & DealStreetAsia

Also, there is at least $220 million of fundraising in the pipeline by Halodoc and MyDoc.

“The investment case is still there, not just for telemedicine but for digital health solutions overall, driven by unmet demand and patient expectations for more empowerment in care delivery,” said Swaroop.

While telemedicine services mainly focus on teleconsultation, the use case for e-pharmacy is also getting firmed up, and this shift from offline to online is expected to persist, he continued.

Indonesia’s Halodoc, for instance, connects the entire ecosystem in one unified software platform and is disrupting inefficient supply chains, said Martin Robinson, partner, HEAL Partners, an investor in the company since its Series A round in 2016. “We’ve seen these business models succeed in China, and now Indonesia, and it is only a matter of time before they scale in other SEA countries… it’s very hard to make teleconsultation-only platforms sustainable in the long run, it’s the integrated ecosystem business models that will be the winners in the long term,” Robinson added.

Challenges

While the opportunity certainly exists, there are bottlenecks — from monetisation to data security — in the path ahead for telemedicine platforms.

There is a gamut of factors still to play out that will determine their long-term prospects in Southeast Asia. Challenges include “cultural preferences toward face-to-face consultations, lack of standardised rules and regulations and maintaining a sustainable economic and payor model for such services,” Quadria Capital’s Teo said. Forging the right business model and monetisation pathway is imperative, Teo added.

For Thailand’s Doctor Raksa, revenues come from a 10 per cent commission fee from the physician, a recent media report mentioned. Meanwhile, Teoh said MyDoc generates revenue from consulting, platform licensing and integration, by selling paid subscriptions to customised and personalised outpatient care services.

Another challenge is data protection. In Singapore, for instance, the healthcare and telemedicine solution providers must ensure that the collection and storage of personal data of patients are adequately safeguarded. These parties also need to comply with the country’s Personal Data Protection Act 2012.

“We follow PDPA guidelines and work on infrastructure security with our cloud datacentre providers,” MyDoc’s Teoh said.

Data security and privacy will be a focus area for each country. “They will have to be nimble around rules and regulations to provide confidence, as digital health adoption increases from telemedicine to big data, IoT, AI etc. It is important…it has to be there,” Swaroop said.

He added that clear reimbursement rules for digital health solutions are also crucial for the continued adoption of digital health services.

Bringing telemedicine platforms under health insurance schemes is a trend that began few years ago. MyDoc, for instance, entered into such an agreement with AXA Insurance in August 2016 and AIA Insurance in December 2018.

“Notwithstanding the merits of telemedicine, it is still very much in its nascency compared to the West. Critical to its success is the ability to localize these solutions in an efficacious, cost-effective and profitable manner.” Quadria’s Teo said.

The road ahead

So far, none of Southeast Asia’s telemedicine platforms have been able to facilitate cross-border services and go beyond local markets. For overseas expansion, acquisitions by bigger global telemedicine players would be needed.

There are other parties that can help to integrate cross-border markets, namely international players like pharmaceutical or medical devices industry players, said Helmut Schuehsler, Chairman and CEO of TVM Capital Healthcare.

The strongest candidates for cross-border integrators may be global insurance companies. “The global insurers have a worldwide business. They, in my mind, will actually consolidate the industry. They have the money, the team, the presence, and the political relationships in the most important countries,” Schuehsler added.

AXA Insurance has already partnered with telemedicine platforms such as China’s Tencent Trusted Doctors, Halodoc, the Philippines’ MyPocketDoctor, Japan’s T-PEC and DoctorsMe, as well as teleconsultation with healthcare services providers such as Bangkok Dusit Medical Services Hospitals and Praram 9 Hospital in Thailand; and Fullerton Health in Singapore.

At the end of the day, the telemedicine industry in Southeast Asia may also need to integrate traditional hospitals and clinics, instead of competing with them. There is also a need for remote care monitoring platforms, wearables and point-of-care diagnostic solutions.

“We are on the cusp of a very exciting period in terms of how technology will transform healthcare delivery globally in the next 10 years and beyond,” said Robinson.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.