Hybrid model seen as way ahead for Vietnam’s digital health firms despite pandemic boom

An unrecognizable woman holds a prescription medication bottle while talking with a doctor during a telemedicine appointment/ Photo: VMware

Even as a slew of healthtech startups in Vietnam has amassed capital from investors to expand their operations, it will take a while for them to carve out the right recipe for success as consumers are still biased towards traditional healthcare.

“Healthtech in Vietnam continues to be a work-in-progress. To fully realize its potential, there needs to be an inclusive architecture to facilitate a wide range of integrated services, and that’s something I think will happen in the next 3-5 years,” said Trung Hoang, head of VinaCapital Ventures, Vietnam’s largest homegrown VC fund.

To be sure, the pandemic has created a significant demand for healthtech startups, with the nationwide lockdown and social distancing norms prompting people to embrace digital adoption.

Key segments that witnessed traction within the larger healthtech umbrella in the country during the last few months are telehealth, e-pharmacies, B2B e-commerce, digital therapy, online fitness, clinical intelligence platforms, patient triaging, doctor discovery platforms, among others.

The boom prompted many healthtech startups established in the 2019-2020 period to raise funding this year as they gear up to carve out their growth plans.

According to data compiled by DealStreetAsia, healthtech startups in the country secured as much as $13.5 million (announced) so far this year, while the amount raised in 2019 and 2020 collectively stood at about $13 million, per Vietnam Innovation & Tech Investment Report 2020 by Do Ventures.

Expand Table

YearCompany NameDetailsFunding Amount / RoundInvestors
2021BuyMedBuyMed, the operator of Thuocsi.vn, the largest online pharma distribution marketplace $9M Series ASmilegate Investment
with participation from B Capital Group and existing investors Cocoon Capital, Genesia
Ventures, Sequoia Capital India’s Surge and Nextrans.
MedigoMedigo, a Vietnam-based startup founded in 2019 with a vision of building a leading telemedicine platform in Vietnam and bringing high quality healthcare services to people$1M Seed TouchStone Partners
DocosanDocosan is a Vietnam-based online marketplace that connects patients to doctors.$1M Seed AppWorks, Huat Ventures, David Ma
MediciMedici is a digital
platform for insurance and healthcare services
Undisclosed Insignia Ventures Partners.
Genetica Genetica was established in 2018 by a group of Vietnamese entrepreneurs, applies AI to decode genes

$2.5 pre Series ADave Strohm, Craig Sherman, Guy Miasnik
AiHealthAiHealth is a medical technology solution that applies artificial intelligence to building a full lifetime health database for each user, connecting every person with their own doctors as well as supporting alerts.UndisclosedTNBA Vietnam Scout and some other investors in Southeast Asia.
Nhi Dong 315Nhi Dong 315 operates a hybrid model integrating its app into the brick-and-mortar systemUndisclosed Series ABDA Capital Partners, Thien Viet Securities

2020BuyMedBuyMed, the operator of Thuocsi.vn, the largest online pharma distribution marketplace $2.5M Pre-Series ASurge, Genesia Ventures, Cocoon Capital
eDoctorThe eDoctor platform allows users to send requests to doctors, and book health checkups and test services that can be conducted at their homes.

Undisclosed SeedBon Angels, CyberAgent Capital, Genesia Ventures, Nextrans
2019Jio HealthJio Health’s services include doctor visits, nursing services, pharmacy delivery, lab collection, telemedicine, and digital medical records.
$5M Series AMonk's Hill Ventures
Med247Med247 operates its own clinic and integrates its technology in helping patients manage their medical records and appointments with doctors, as well as get health consultation at ease.
Undisclosed Pre-Series AKK Fund, Venturra Capital

Challenges galore

The long-term prospects of the healthtech space hinges on several factors such as readiness of clinicians to adopt technology; change in the patient behavior; regulatory clarity and the implementation of healthtech apps by hospitals and insurers.

“It can take a lot of time for all of those elements to be in place before a healthtech startup can actually get its solution or service implemented for the benefit of consumers,” Hoang said.

Given that physical human interaction still remains a core part of the overall healthcare experience, startups need to pour in more resources to educate the market about the benefits of digital adoption to expand their user base.

According to Huy Tien Nguyen, an experienced doctor at the Military Institute of Radiation and Oncology Medicine, telemedicine can contribute to developing the overall public healthcare system as it helps reduce the burden for public hospitals during the pandemic.

“However, telemedicine can never replace face-to-face [physical] medical examinations,” he emphasised. “There are diseases where the tumor is deep in the body and it is difficult to recognise by the patient’s senses. Therefore, it is still very necessary to have a face-to-face examination to be intervened with special tools,” he added.

VMware’s Digital Frontiers 3.0 Healthcare Study, which was released on September 23, revealed that only 36% of Southeast Asian respondents are currently happy to interact with healthcare services providers digitally.

Seemant Jauhari, managing partner at healthcare-dedicated VC fund HealthXCapital, while speaking at the recently-held DealStreetAsia Asia PE-VC Summit, pointed out how the adoption of healthtech is “unlikely to happen overnight.”

“Telemedicine, online pharmacies and virtual consultations have all been around – in some cases for over a decade – but they’ve existed at the fringes,” he added.

This is primarily because the out-of-pocket spending on pharmaceutical products in Vietnam is the highest in Southeast Asia – patients in the country often like to self-medicate themselves by going to the nearest pharmacy rather than going to a clinic or a hospital.

“In order to achieve mass-scale adoption of healthtech, further government support and policy incentives will be required for universal health coverage,” said Valerie Van Vu, associate at Indonesia-based venture capital firm Venturra Capital.

The latest report of Venturra Capital on Southeast Asia’s Healthtech Journey shows that Vietnam is one of the countries that have the lowest government health expenditure per capita.

According to the report, the government spending on healthcare per capita in countries like Vietnam, Indonesia and the Philippines stood at $200, $185 and $128 in 2018, while the number in Singapore was way higher at $2,235. In Thailand and Malaysia, they stood at $510 and $611, respectively.

She points out that there is no regulation on reimbursement schemes from Vietnam’s Social Security, or private insurance providers for telemedicine. The adoption of electronic health records is still low, making medical information management inefficient.

Hybrid approach 

“I believe the future will see a hybrid approach, with tools like telemedicine to help with diagnostics and screening, where patients will be referred to in-person consultations and further treatment where necessary,” said Will Klippgen, managing partner of Singapore-based early-stage investor Cocoon Capital.

The VC recently backed BuyMed, the operator of Thuocsi.vn, in its $9 million Series A round.

According to Beth Ann Lopez, co-founder & CEO at Docosan, telemedicine offers a chance to reinvent both virtual and hybrid personal care models.

The company claims to have witnessed a 200% growth in telemedicine bookings in the last two months alone when it offered a COVID self-test kit for delivery, thereby combining it with an optional telemedicine consultation for patients to discuss results.

Going forward, the adoption of mobile wallets and fintech can give consumers more ways to subscribe to a combination of insurance and healthcare products/services, said Hoang from VinaCapital Ventures.

“On one hand, the pandemic has created more weight on healthcare infrastructure. On the other, it has created opportunities for consumers, even those in rural areas, to try and experience digital healthcare solutions.”

Meanwhile, Duc Anh Ngo, CEO and co-founder at Medici, highlighted how the shift towards digital spurred the growth of healthtech firms amid the pandemic.

“Even among the low-income groups, people are increasingly willing to pay extra for quality credible healthcare services. As Vietnamese grow tech-savvy, they are more interested in teleconsultation and e-pharmacies,” he said.

In August,  Medici recently raised an undisclosed seed round led by Insignia Ventures.

The silver lining

Investors see artificial intelligence and other tech-heavy applications play an important role in the development of healthtech, particularly in diagnostics and screening.

“We see how AI assists or sometimes even replaces the judgment of medical professionals across all areas, including stroke, cancer, and other conditions. AI is usually applied in image recognition,” said Cocoon Capital’s Klippgen.

Echoing the views, Hoang of VinaCapital Ventures said AI can be used for data that is still scattered across many systems.

The other major technology trend that the sector is going to witness is with regard to the use of genetic testing. Some of these tests can be done through test-at-home solutions, achieving increased accessibility and reduced costs for patients.

Vietnam’s healthcare expenditure in 2019 was approximately $17 billion, equivalent to 6.6% of its GDP. Going forward, the number is expected to touch $23 billion in 2022 at a compound annual growth rate (CAGR) of 10.7%, according to Fitch Solutions.

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.