healthtech_investment_report

In the first half of 2018, funding in the Asian healthtech sector reached US$3.3 billion across 107 deals, more than US$550 million higher than the full year figure in 2017, according to a new report by Galen Growth Asia.

The total funding grew by 61 per cent compared to H1 2017, and this figure excludes the US$1.1 billion IPO by Ping An Hao Daifu (Good Doctor) in Hong Kong in April.

Called the Asia HealthTech Investment Landscape Half Year 2018, the report also predicted that the figure is on track to reach US$5 billion by the end of the year.

It also revealed that after nine consecutive quarters of deal value growth, the growth continued and placed Asian healthtech ecosystem in the number two spot of global healthtech ecosystem by deal value.

“Beyond pre-IPO and IPO activities, we continue to observe a strengthening of investor appetite for growth stage ventures, with deal value growing and the overall distribution of funding in growth stage deals accounting for 30 per cent of total funding. In contrast, enterprises’ digital health focus remains largely timid in Asia Pacific,” explained Galen Growth Asia CEO and Founder Julien de Salaberry.

According to the report, the fast growth in deal value total in this period is accompanied by a slower growth in the total number of deals, which increased 24 per cent compared to the second half of 2017.

It has led to an average deal value of US$31 million, up from US$16M in H2 2017.

The report also predicted further IPOs in H2 2018 for Asian healthtech startups such as We Doctor (GuaHao), which had recently raised US$500 million in a pre-IPO round. In addition to the Tencent-backed company, it also expected to see an IPO of Temasek-backed Grail.

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China and India, as always

When it comes the most popular markets for healthtech startup investments, India and China top the list with 32 per cent and 22 per cent respectively. They are being followed by Singapore (11 per cent) and Japan and Australia (eight per cent).

Combined together, China and India made up 79 per cent of all deals by volume, which was a three per cent increase of 2017 figures.

The report also named China as home to the largest healthtech IPO in history for the region, with Ping An Hao Daifu’s US$1.1 billion IPO.

In Southeast Asia, Singapore is named as the market that continues to be “an attractive location” to set up a healthtech business, thanks to its solid legal framework, economic stability, and government incentives.

In addition to Singapore, Indonesia also came out in the report as an attractive market. Opportunities are plenty in the country due to its demographics, disease burden, and limited health infrastructure.

Can I see the doctor?

When it comes to the most popular categories that have raised significant funding in H1 2018, services that are related to patient journey continues to dominate the top five list by deal volume.

The following is the most-funded categories by value in 2018:

1. Health services search (US$2.08 billion, 14 deals)
2. Online marketplace (US$474 million, 12 deals)
3. Genomics and related apps (US$220 million, 12 deals)
4. Medical data and analytics (US$87.4 million, 10 deals)
5. IoT health and wellness (US$74.1 million, five deals)
6. Medical diagnostics (US$42 million, three deals)

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