At Malpani Ventures, Health-tech is a key focus area for us. Some themes we are keen to pursue include opportunities in the formalization of healthcare, improving diagnostics/ insurance penetration, last-mile healthcare delivery amongst others.

In this blog, we share some of our key takeaways on assessing an opportunity in the diagnostics market in India:

A large B2C market, limited B2B scope!

The $10B Indian diagnostics industry has emerged as one of the fastest-growing service segments in India’s healthcare ecosystem. It is currently growing at a CAGR of 12% YoY and is expected to be a $15B industry by 2025.

However, while assessing specific solutions it is critical to look for the market size of that specific sub-sector. E.g.: We originally envisaged the B2B haematology market to be large given the breadth of the diagnostics industry. However, the target market for haematology equipment and reagents in India was only Rs 1,000 cr in 2019. Further, only about ~15,000, CBC analysers were sold annually.

Testing (Especially the routine ones) in large towns has been solved for?

Supply chains are fairly efficient resulting in low costs for hub & spoke models thus providing patients with results in an 8–10-hour time-frame

However, there is scope for solutions to make a dent in rural towns/ areas with low coverage. Solutions in such a case need to be affordable, work in areas with fluctuating electricity and be easy to use!

New medical/ diagnostic solutions need to think out-of-the box for validation

Typically, the medical community is reluctant to accept test results from new devices readily.

Another problem we foresee is the need to have a secure source of data, obtained with full patient knowledge and consent. New companies/ solutions to prove their efficacy will have to tie up with other commercial labs - to further train its AI.

Large scope to grow:

We are firm believers that radical innovation in Point of care (POC) diagnostics will become a massive hit in India and across the globe. There are over 110,000 diagnostics centres in India and ~60% of these centres are highly unorganised with little/ no-technology adoption. Testing in India is 3x lower than in developed markets, thus giving a big opportunity for diagnostics in India to grow fast

If you are building in health-tech, do write to me or Siddharth with your thesis