Home to 700 million people, Southeast Asia represents a large, expanding and ageing population for healthcare technology to address. Unlike the global macro markets which are correcting amidst rising investor uncertainty, healthcare in Southeast Asia is showing strong growth, compared even to the records set in 2021.
Based on data from Galen Growth, the leading digital health data platform, 21 new VC deals were closed in Southeast Asia in the first half of 2022 compared to 19 in the same period last year. In terms of the dollar value of those investments, US$452 million was invested by VCs into SEA digital health in the first half of 2022 compared to US$206 million in the same period last year.
We predict that 2022 digital health investments in full-year 2022 will land in the US$750 million range, up 20-25 per cent year on year. This stands in stark comparison to global VC funding which has pulled back substantially, falling to US$247 billion in the first five months of 2022 compared to US$257 billion in 2021, according to Crunchbase data.
This divergence is accelerating, in May 2022, global VC funding fell below US$40 billion for the first time since November 2020, whereas SEA healthcare is ramping up.
Why is SEA digital healthcare VC a bright spot in the global VC market?
We believe due to regional supply-demand fundamentals and the ground shift brought about by COVID-19. An analysis of indicative “bellwether” deals in the first half of 2022 suggests that healthcare technology-enabled primary care services are where the action is at, as reflected in recent investments.
Also Read: The emergence of telehealth in post-COVID-19 Southeast Asia
For instance, SwipeRx, an e-pharmacy platform; Us2.ai, a cardiology diagnostics platform; Jio Health, a telehealth platform; and Med247, Altara’s most recent Vietnam investment and national leader in technology-based primary care. In combination, those four SEA deals raised in excess of US$65 million in Series A/B capital this year.
Healthcare investment thesis for SEA
Altara’s Investment Thesis is focused on the five critical market segments that make up the majority of the digital health sector in this region:
- Tech-enabled providers
- Platforms and online marketplaces
- B2B SaaS
- Drug and device producers
- Digital models of health insurance
We will focus primarily on regional startups that aim to solve problems within the largest patient and revenue pools. These include digital screening and diagnosis, hybrid online-offline patient services, and digitalised pharmacies, which are forecasted to compose 75 per cent of the market in 2022, according to RedSeer a market research firm.
We will also focus selectively on the life science value chain and healthcare deep tech startups that emerge from the Singapore life science cluster.
Predictions for beyond 2022
In the longer term, we believe that as the market matures, the SEA opportunity set will move from addressing access to primary care towards a focus on the later stages of the patient journey that involve specialised and higher-value services in areas such as cancer, ageing care, and speciality pharma.
If you’re an ambitious digital health entrepreneur looking to build the healthcare economy in SEA, we look forward to partnering with you.
–
Editor’s note: e27 aims to foster thought leadership by publishing views from the community. Share your opinion by submitting an article, video, podcast, or infographic
Join our e27 Telegram group, FB community, or like the e27 Facebook page
Image credit: Canva Pro
The post Where is Southeast Asia’s digital healthcare headed? appeared first on e27.