The team behind HealthXCapital, which invested in and helped health tech startups scale up, has joined Singapore-based Jungle Ventures. Seemant Jauhari, who led HealthXCapital since it was founded eight years ago, is now a partner at Jungle, where he will invest in healthcare startups in Southeast Asia and India.
HealthXCapital’s portfolio includes RED.Health, Homage, Medfin and THB. The firm has fully deployed its first fund and will no longer make any further investments.
At Jungle, Jauhari will take a similar approach as he did at HealthXCapital, combining capital with strategic partners in the healthcare sector to help startups toward validation and commercialization. These partners include providers, distributors and IT system integrators.
Jauhari noted that about 30% of the global population live in India and Southeast Asia, but the regions are very underserved, with just 4% of the gross domestic product going toward healthcare. That’s where he sees an opportunity for digital healthcare and new business models to increase access to healthcare.
As an example of how Jungle has worked with healthcare startups, Jauhari said one of its portfolio companies needed to expand from five to 12 cities. Securing supply from providers was crucial to meet demand, so Jungle’s board partners worked with the startup to create a time-bound group level plan. Then, based on that plan, it used its strategic network to facilitate crucial partnerships across healthcare providers. Then an operational partner helped the startup run a unit economics optimization initiative that improved margins by almost 20% to 25%.
Jauhari added that key trends emerging in Asian health tech include large-scale adoption of digital platforms in markets like India, Singapore, Indonesia and Vietnam and specialty care growing by taking a “phygital” approach through a combination of brick-and-mortar locations and online platforms.
In terms of valuations, Jauhari said it has not been a major concern for the healthcare sector since it has been underfunded especially at venture growth stages.
“Case in point, in the last five years, of the 2000+ healthcare startups in India and Southeast Asia, less than 10% reached the venture growth stage and less than 20% of the total capital invested in the region has been invested in venture growth,” he said. “Hence, we see a clear opportunity to invest in an undercapitalized stage and region. Combining this with the resilience of the healthcare sector, we believe that sustainable and scalable businesses will drive steady valuations.”