India-focused healthcare VC firm HealthQuad raises nearly $150 million for its second fund

India-focused healthcare venture capital firm HealthQuad announced the pre-final close of its second fund after it raised ₹1134.5 crores (nearly $150 million). The number exceeds the target fund size of ₹550 crores by more than twice and goes on to show the ever-increasing appetite for investors to continue banking on world’s fastest growing internet market.

The healthcare industry has been technologically accelerated by the pandemic. People have gone online for telemedicine and booking hospital appointments like never before, something that was witnessed in rare cases (less than 10%) in the pre-pandemic period. Research shows that over 85% of doctors used teleconsultation methods during the pandemic, and more than 45% of patients from non-metropolitan cities used the teleconsultation method during the pandemic. This adoption of digital methods to access healthcare (and the subsequent rise of healthtech startups) has not been restricted to India alone but spread to other countries as well.

Charles-Antoine Janssen, Co-founder and Chief Investment Officer of HealthQuad, said, “The healthtech sector has already seen investments of more than USD 1.9 billion in 2021 with cumulative investments of more than USD 4 billion over the last 4 years. The Indian health-tech sector is expected to grow at a CAGR of more than 25% to reach a market size of USD 21 billion over the next 5 years. HealthQuad is committed to creating an ecosystem of category defining companies that improve accessibility and affordability and elevate the overall healthcare standards in India.” Some data puts number of healthtech companies in India to 7000, a massive yet understated number considering the size of market India has.

Currently, more than 175 million households in India have the potential to access digital healthcare, and at least 20% of healthcare transactions are expected to shift to virtual mode. It seems that the pandemic, for all the woe it has brought us since 2020, has been beneficial for the healthcare segment, especially in India. Today, healthtech and traditional healthcare go hand in hand, and healthtech startups have expanded and even evolved into unicorns.

With India on the path to becoming the third-largest economy with the largest population in the world by 2030, and continuing to record a rise in chronic diseases, the demand for the healthcare and healthtech sectors is only increasing.

It seems that the matter is not yet over, and the size of the fund is likely to increase by another 20-25%, should investors agree. The fund has received commitments from global financial and strategic institutions, including some global pharma and health-tech companies, development financial institutions, and large European conglomerates, and will be achieving a final close by March 2022.

While 80% of the fund has been raised from overseas investors, the remaining 20% has come from domestic institutions.

HealthQuad, founded in 2016, has already invested in several healthtech companies such as Medikabazaar, THB, HealthifyMe, and Impactguru, and is looking to invest in 12-14 companies, with the cheque size of around $5-20 million.

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