Healthcare Tech Startups in India, Part 3: How Healthcare Startups Are Serving the Sector 1) India s growing senior population, shortage of medical personnel, high out-of-pocket healthcare expenditures and large rural population are some of the main challenges affecting the healthcare sector in the country. 2) Despite these challenges, the healthcare tech startup sector is thriving, and many domestic startups are working to address the problems unique to healthcare provision in India. 3) Indian healthcare tech startups had received $200 million in disclosed funding this year as of July 31. That figure is up from total funding of $154.8 million in 2016. Deborah Weinswig Managing Director FGRT deborahweinswig@fung1937.com US: 917.655.6790 HK: 852.6119.1779 CN: 86.186.1420.3016 1
Table of Contents Executive Summary... 3 Introduction... 4 Category: Health, Wellness and Lifestyle Management... 4 Startup Profile: Grow Fit... 5 Q&A with Jyotsna Pattabiraman, Founder and CEO, Grow Fit (GetGrowFit.com)... 6 Category: Home Healthcare... 9 Startup Profile: Portea Medical... 9 Q&A with Meena Ganesh, Managing Director and CEO, Portea Medical (Portea.com)... 10 2
India s population is highly underserved in terms of healthcare, with less than one doctor and one hospital bed available per 1,000 people. Executive Summary Many challenges hinder India s rapid economic growth, but the healthcare tech startup sector is thriving, with many startups working to address the problems unique to healthcare provision in India: 1. India s senior population is growing in absolute numbers (it currently stands at 77 million), although it remains a relatively small proportion of the total population (about 6%). 2. India s population is highly underserved in terms of healthcare, with less than one doctor and one hospital bed available per 1,000 people. 3. Indians pay some of the highest out-of-pocket costs for healthcare in the world. Some 62% of the population s total healthcare expenditure is not covered by insurance and is not reimbursed. 4. About 67% of Indians live in rural areas. This has traditionally limited many consumers access to certain kinds of healthcare services that are viable only in areas of high population density. Two startups that are addressing these challenges with the services they provide are Grow Fit and Portea Medical. Grow Fit Grow Fit is a health and wellness company that provides advice and counseling on various aspects of wellness through its website and app. It uses a combination of data science, medical science and behavioral insights to create a well-researched, personalized meal and fitness plan for each customer. Some 60% of Grow Fit app users are from tier-2 and tier-3 cities in India, and more than 1,000 chat sessions are held every day. As its services are primarily provided through the app, consumers outside large metro areas are able to easily access the company s services. Portea Medical Portea Medical provides in-home geriatric care, postoperative care, palliative care, physiotherapy and other medical services across 16 cities in India. It has about 4,500 staff, including physiotherapists, nursing attendants, nurses and doctors, who undertake at least 100,000 home visits per month. Apart from steadily expanding its offering and availability in more cities, Portea Medical has been making strategic acquisitions and investments in healthcare tech. 3
Introduction Providing affordable and accessible healthcare is one of the key goals of governments around the world, and it is no different for India. The country s healthcare sector is large and complex, with its own unique challenges. The Indian wellness sector was estimated to be worth $13.3 billion in 2015. India s senior population is growing in absolute numbers (it currently stands at 77 million), although it remains a relatively small proportion of the total population (about 6%). India s population is highly underserved in terms of healthcare, with less than one doctor and one hospital bed available per 1,000 people. Also, Indians pay some of the highest out-of-pocket costs for healthcare in the world, and some 62% of the population s total healthcare expenditure is not covered by insurance and is not reimbursed. About 67% of Indians live in rural areas, and this has traditionally limited many consumers access to certain kinds of healthcare services that are viable only in areas of high population density. However, many startups in India are keen to address these challenges. According to data from Indian business blog and startup tracker Trak.in, Indian healthcare tech startups had received $200 million in disclosed funding this year as of July 31. That figure is up from total funding of $154.8 million in 2016, according to startup platform YourStory. We explored some notable healthcare tech startups that have created innovative solutions and discussed the above challenges in detail in the first and second reports in our Healthcare Tech Startups in India series. As part of our research, we also spoke with the founders of two Indian healthcare startups Grow Fit s Jyotsna Pattabiraman and Portea Medical s Meena Ganesh to understand how they are addressing the challenges and gaps in India s healthcare sector. In this report, the third in our series, we briefly discuss the categories of healthcare technology that these two startups serve, profile the companies and share excerpts from our interviews with the founders. Category: Health, Wellness and Lifestyle Management The Federation of Indian Chambers of Commerce and Industry (FICCI) estimated that the Indian wellness sector was worth $13.3 billion in 2015. The organization s definition of the wellness market in India included beauty and personal care, nutrition services, fitness centers, and alternative treatments and therapy. FICCI expects the market to grow at a CAGR of 12%, to $26.3 billion, by 2020. Key drivers in this sector are the lifestyle diseases that are resulting from consumers increasingly busy lives, growing awareness of healthcare management, rising affluence and an increasing cost burden on the healthcare system. Top startups in this segment include Grow Fit, Cure.Fit and Gympik. 4
Startup Profile: Grow Fit Source: GetGrowFit.com Business brief: Grow Fit is a health and wellness company that provides advice and counseling on various aspects of wellness through its website and app. Grow Fit also sells packaged foods including breakfast items, healthy mixes, snacks and beverages and meal plans that include fresh food in three packages the Whole Grain Office Lunch, the Stay Fit Diet and the Lean Machine Diet. Consumers can buy these through a subscription program, based on their health needs and fitness levels. Competitive advantage: Grow Fit is one of the few startups in the Indian health and wellness segment that enjoys high visibility. It is part of GrowthStory, a well-reputed entrepreneurship platform that has founded and mentored several successful startups in India. Dr. Ranjan Pai, the CEO of Manipal Education and Medical Group (MEMG), is on the company s board of directors. MEMG is the private equity arm of the Manipal Hospitals group one of the top hospital chains in India. Grow Fit uses a combination of data science, medical science and behavioral insights to create wellresearched, personalized meal and fitness plans for each customer. Traction: Grow Fit has approximately 25,000 customers for its packaged food and meal plans, and its customer base has registered growth of 30% every month. Grow Fit s fresh food plans are currently available only to customers in Bangalore, but will be available in two more cities in the next six months. The company s packaged foods are available for purchase across the country. Grow Fit s chat services subscription revenue has been doubling every month and food subscription orders have grown by five times since March 2017. Some 60% of the app users are from tier-2 and tier-3 cities in India, and more than 1,000 chat sessions are held every day. So far, some 200,000 diet charts have been shared and Grow Fit s customers have lost over 90,000 kilograms (198,000 lbs) in total. Grow Fit intends to use the funds it recently raised to expand to 10 more cities across India. Funding: Grow Fit has raised $4.5 million in series A funding and is one of the top-funded Indian health tech startups in its category so far this year. 5
Q&A with Jyotsna Pattabiraman, Founder and CEO, Grow Fit (GetGrowFit.com) Source: YouTube Q: Can you briefly explain how Grow Fit works and what prompted you to found it? A: Grow Fit is a health tech and wellness company. Users of the Grow Fit app can access our medical and health experts, clinical nutritionists and experienced cosmetologists to discover personalized solutions that are built specifically for them. This involves expert advice (given via the mobile app) as well as therapeutic and functional foods from Grow Fit, which include fresh foods (ready-toeat) and staples (packaged foods). Grow Fit App in itunes Preview Source: itunes We help our customers achieve peak wellness by using a combination of data science, medical science and behavioral insights. Our aim is to become a comprehensive daily health companion for those on their health journey. 6
The seed for founding Grow Fit was sown a couple of years ago, when it seemed that almost everyone I knew had been diagnosed with something frightening at a relatively young age. Doctors seemed to talk in generalizations rather than about what was right for me or the people I know. I had been working with Internet and mobile companies in both the US and India, and I knew about the power of data for understanding what is right for you and contextual interventions for driving behavior change. I believed that we could use the power of technology to understand the problem better and drive meaningful interventions. Customers interested in health can purchase anything from a weekly plan to a full-service program. Our customer base is registering an increase of 30% every month. So, in the last 12 months, we ve grown more than 300%! Q: Where is Grow Fit positioned in the market? Is it available only in Bangalore? A: The target user for our food seeks solutions for therapeutic or functional foods that person wants to meet a goal. Our approach is backed by data science, medical science and behavioral insights, and meal plans are well researched and customized. Hence, customers investing in their health through Grow Fit see results very quickly. Grow Fit customers are people who have done their homework they are independent thinkers who know what they want. They value Grow Fit s scientific approach and commitment to results. These are customers who have a specific set of requirements in mind and understand that we are solving a very significant pain point for them. Our fresh food is available only in Bangalore currently, and will be available in Hyderabad and another city in the next six months. Our packaged food is available around the country. Source: GetGrowFit.com Q: How many customers does Grow Fit have and how has it gained traction so far? A: We have approximately 25,000 customers. Grow Fit s chat subscription revenue has been doubling month over month and the food subscription revenue has grown by over five times. 7
The mobile app, Grow Fit, has been downloaded over 300,000 times. About 60% of the users come from tier-2 and tier-3 cities. We have shared approximately 200,000 diet charts and more than 90,000 kilograms have been lost by our customers in total. We do more than 1,000 chat sessions each day. The funds we recently raised will be utilized to expand to 10 more cities, including Hyderabad, Jaipur and Mumbai. Q: What were some of the challenges you faced while establishing Grow Fit? A: There are certain myths surrounding health and fitness, especially in the Indian context, and getting people to change practices that they have always believed in is tough. But we have the data to justify our approach. The only other challenges I see going forward are on the execution front. There is huge demand for an accountable, economical, convenient, scienceled option to prevent lifestyle disease. Credibility overrides everything in the health and wellness business, and we will need to continuously focus on ensuring that we relentlessly execute this every day. Q: What is Grow Fit s competitive advantage? A: A key factor that differentiates Grow Fit from others is the full-stack approach and the fact that the company takes responsibility for the outcome rather than leaving it to the client. This is an audacious step, since it takes on several complexities in managing the health outcome, and it is a significant shift from the common trend of having the client bear the burden of his or her own cure. Grow Fit aspires to differentiate itself as a result-driven and consumer-oriented company by incorporating approaches such as this, now and in the future. Q: Do you see a growing trend for wellness and wellness-related services? Have customers requested specific services that were not originally part of Grow Fit s offering? A: About 300 million Indians are at risk of contracting a lifestyle disease. According to the World Health Organization, over 6 million lives are lost in India every year from lifestyle diseases, and the World Economic Forum estimates that the economic burden of these diseases will cross over $4.58 trillion. The opportunity is really to address the demands and meet the expectations of the new digital wellness consumer. While Health 1.0 was reactive and geared toward treating injury, infection and emergencies, Health 2.0 is built on a new paradigm that is customer-/patient-centric, with a focus on providing preventive healthcare and being proactive and omnichannel in terms of approach. Grow Fit is empowering its customers with a do it for me approach. It understands the importance of adopting a localized approach and provides data-driven health strategies tailored to India. In fact, it goes beyond advice to cover the last mile, formulating foods that improve health metrics significantly in a matter of weeks. 8
Source: GetGrowFit.com Grow Fit intends to become everyone s comprehensive daily health companion in the future. Currently, we have 10 patent-pending products. We will now focus on introducing new product lines and invest more in data science and artificial intelligence. Future plans include tackling fertility and issues related to pregnancy and lactation, joint health, stress management, and more, all through mobile. We also plan to integrate different sources of data from wearables and medical reports in order to make the app a onestop, comprehensive companion for wellness. The home healthcare market in India was worth an estimated $4.1 billion in 2016. Category: Home Healthcare In India, the home healthcare market which consists of healthcare services that are provided within the consumer s home was worth an estimated $4.1 billion in 2016, according to consultancy firm RedSeer. The firm expects the market to grow at a CAGR of 40% to 2018, to $8.1 billion. Key drivers in this category are India s growing aging population, consumers increased disposable incomes and a cultural shift that is resulting in fewer joint families residing together in a single home. Portea Medical is one of the most heavily funded startups in this category. Other notable names are HealthCare athome (HCAH) and Medwell Ventures. Startup Profile: Portea Medical Source: Portea.com 9
Business brief: Portea Medical provides in-home medical services across 16 cities in India. It has about 4,500 staff, including physiotherapists, nursing attendants, nurses and doctors, who undertake at least 100,000 home visits per month. Portea Medical provides geriatric care, postoperative care, palliative care and physiotherapy. It also collects lab samples from patients homes for diagnostic analysis and rents out medical equipment necessary for in-home care. Competitive advantage: Portea Medical has a first-mover advantage and has built its brand in this segment. It is part of an entrepreneurship platform called GrowthStory that founds and mentors startups, several of which have turned into successful ventures. Traction: Apart from steadily expanding its offering and availability in more cities, Portea Medical has been making strategic acquisitions and investments in healthcare tech. Funding: Portea Medical has raised $46.5 million so far from Ventureast, Qualcomm Ventures, International Finance Corporation and Accel Partners. Founder Meena Ganesh told reporters recently that Portea Medical hopes to raise some $25 million this year. Q&A with Meena Ganesh, Managing Director and CEO, Portea Medical (Portea.com) Q: How did you identify the opportunity for home healthcare as a viable business, since it was formerly a largely unorganized sector in India? A: Portea Medical is the largest service provider in the Indian home healthcare space. We handle 120,000 visits each month across 16 cities and have 4,500 employees. We have received $46.5 million in funding from the International Finance Corporation, Accel, Qualcomm Ventures and Ventureast. GrowthStory s involvement with Portea resulted from a deeply personal experience. A close family member was diagnosed with cancer and I saw firsthand the difficulties involved in taking care of a terminally ill person. I realized Source: Portea Medical the many challenges involved and the dearth of options for quality medical care at home in India. This was also the time when we had just exited our previous venture, TutorVista, and were exploring various opportunities. We found that the lack of affordable and quality home healthcare in India was a big pain point and provided a large white space opportunity that we felt we could address. 10
Home healthcare has been in existence in the US for more than a century. In Europe, countries such as the UK have an established model of in-home healthcare. In that sense, the business is not completely new. However, it has never been attempted before in India at the scale at which we are operating and expanding. As I mentioned previously, we saw the need for affordable, quality home healthcare. It was obvious that ours was not an isolated case; there was a genuine dearth of options for quality medical care at home in India. We were confident we could build a category leader in the sector. Our thinking is that India is still a great country to invest in. The domestic market is huge and completely untapped and the potential is now even larger than ever before! Q: How integral is technology in providing Portea s services to its customers? A: The Portea platform sits on a network that divides every city into geofences. When a request comes in, an algorithm helps identify a clinician based on patient location, preferred time slot, type of service requested and clinicians calendars. A clinician is then assigned to the patient. Clinicians have access to the Portea app to access the patient s medical history and check specific instructions from the consulting specialist. Realtime updates of patient vitals are provided to the Portea patient health record via the device. We also have remote monitoring devices for chronic disease management, so measurements such as blood pressure, temperature, blood sugar, electrocardiogram (ECG), etc., can be captured. Alerts are issued if a patient s vitals cross preset thresholds. Checks are also conducted for adverse drug reactions for any new drugs prescribed against the patient s existing drug prescriptions. All patient data are encrypted and stored on secure servers. In June this year, Portea announced a project in collaboration with Physitrack, a UK-based firm that provides healthcare companies with prescription clinical home exercise and patient education videos and literature and real-time outcome-tracking solutions. It is also the world s first specialized telehealth platform for physiotherapy. This is one of the rare instances where telehealth is being used in physiotherapy, a field where treating a patient face-to-face has been standard practice. The collaboration with Physitrack will primarily help in providing prescriptive video exercises to our patients, equip us with an outcome measurement scale to gauge progress remotely and facilitate online consultations with physiotherapists via video calls, thus saving a tremendous amount of time and enabling better convenience. Similarly, our project with Diabetacare enables real-time monitoring of glucose levels for diabetes patients who are under Portea s care, while a separate partnership with Vios Medical supports continuous monitoring of vitals (such as pulse, blood oxygen saturation levels and blood pressure) and ECGs for critical and semicritical patients. The Portea-Diabetacare partnership enhances diabetes patient care by providing alerts through a 11
smart glucometer after every blood sugar check, minimizing risk of errors and improving clinical outcomes. Glucose levels are monitored instantaneously and the readings are forwarded to caregivers, including the treating physician, diabetes management team, and family members or friends. This allows for faster intervention, leading to more optimal patient care. Vios Medical s solution provides real-time, continuous monitoring of all vitals and ECGs, and transmits those data through cloud technology to a care team comprising the patient s kin, doctors and nurses from Portea, and the referring specialist (either a cardiologist or an intensivist from a hospital). Using technology, Portea s solution enables real-time, ICU-style critical care at home with on-site medical service staff and a central medical team monitoring the entire setup remotely. Source: Portea Medical Q: How has Portea evolved since its inception and what has it learned from its customers needs that have led it to expand its service offering? A: From Portea s standpoint, we have been able to envision 360-degree services, i.e., we have actioned our services with our customers and patients at the center and built a comprehensive offering around them that includes all aspects of primary care, diagnostics and the provision of medical equipment. We do this while working with members of the wider ecosystem, such as hospitals, pharmacies, insurance players and device companies, to ensure the entire gamut of healthcare is delivered conveniently and cost-effectively. We have also built the Portea Cherish member engagement program. The Cherish referral program is one of the strongest acquisition channels for the organization. The program contributes to about 20% of total Portea acquisitions every month, against a 9% referral contribution before it was launched. Most loyalty programs are targeted at individuals, but ignore the possibilities of engaging the family. Portea focuses on engaging the family, 12
and the program allows family members of existing customers to register and avail themselves of the benefits of services under a single ID. Some 33% of the total base registered their families with Portea Cherish in the first nine months of the program s operation. This implies that individual patients not only trust Portea for their own health needs, but also for those of their families. The benefits of having family members registered under a single ID include a dedicated health manager to handle the family s requirements and the ability to share health miles among the members, which allows them to use the various services provided by Portea. The advantage of having a wide service portfolio ensures relevance for all life stages. Through this exercise, we observed that: A third of our customers registered their families a rate substantially higher than that seen among same family members visiting a single hospital brand. About 40% of guardians or caregivers eventually start using our services. Some 65% of senior customers have their guardians or caregivers registered with us. Subscription-based plans for senior customers, initiated by their children, have grown by four times in the last six months. Q: How do you see emerging technology such as the Internet of Things playing a role in eldercare? Will there be an uptake of smart-home technology in day-to-day care for seniors? A: The elderization of homes is a key opportunity. The life expectancy of Indians has gone up significantly in one generation. This will only increase in the coming decades, and it is absolutely critical that the homes of elders are appropriately fitted out to support their needs as they age. Q: Apart from home healthcare, what do you envision to be the largest growth categories in healthcare tech in India? A: Remote monitoring, telehealth and information discovery platforms related to healthcare are attractive spaces. Healthcare will continue to attract attention and capital from those who are interested in truly creating an impact. 13
Deborah Weinswig, CPA Managing Director FGRT New York: 917.655.6790 Hong Kong: 852.6119.1779 China: 86.186.1420.3016 deborahweinswig@fung1937.com Swarooprani Muralidhar Research Assistant Hong Kong: 2nd Floor, Hong Kong Spinners Industrial Building Phase 1&2 800 Cheung Sha Wan Road, Kowloon Hong Kong Tel: 852 2300 4406 London: 242-246 Marylebone Road London, NW1 6JQ United Kingdom Tel: 44 (0)20 7616 8988 New York: 1359 Broadway, 18th Floor New York, NY 10018 Tel: 646 839 7017 FungGlobalRetailTech.com 14