The Resilient and Growing HealthTech Sector

Start-ups in Southeast Asia (SEA) had raised about US$7.72 billion in funding from 716 equity deals and a combined figure if US$836 million from 41 debt deals for the entire 2023. Lazada alone had raised US$1.9 billion last year from its parent Alibaba Group. The funding raised in 2023 was a decline compared with US$15.82 billion and US$1.97 billion raised from equity and debt deals, respectively, in 2022 with total deals that year amounted to 1,061. Collectively, the SEA experienced a 29% drop in deal volume in 2023 compared to the previous year. The region also saw deal values plummet by more than 53%.

Experts had attributed the decline in venture funding across SEA to two factors i.e. (1) inexperienced venture capital firms investing in marginal ideas at excessively high valuations, and (2) difficulty in raising from limited partners (LPs). 

HealthTech in Singapore

Amid a global funding downturn in 2023, Singapore continues to stand out as the top fundraising hub in SEA, in terms of deal volume and value. The country also remains an attractive hub for startups in the HealthTech space even during the post-pandemic era with double the amount of HealthTech deal activity taking place since 2022 and deal volume was more than doubled last year.

The pandemic has created higher awareness and acceptance of the use of technology to facilitate healthcare delivery. Telemedicine and other related services are more widely adopted now. Further fuelling telemedicine’s potential in the region are ongoing advancements in AI and big data, which hold promise for innovations in diagnostics, personalised care plans, and health insurance accessibility.

HealthTech Remains a Focal Point of Interest

Despite a challenging fundraising landscape, the HealthTech sector showcased resilience in 2023, experiencing a notable surge in deals. With a total of 60 transactions, marking a 20% increase from the previous year, HealthTech rivalled e-commerce in deal volume.

Leading the charge in the HealthTech arena was telemedicine, securing the majority of deals with a total of 17 transactions. Following closely were curative and diagnostics technologies, with 15 and 16 deals respectively, underscoring the sector’s wide array of innovative advancements.

Among the standout performers in this flourishing ecosystem is Mesh Bio, a pioneering HealthTech startup utilizing predictive analytics for chronic disease management. Mesh Bio successfully secured US$3.5 million in a Series A funding round, bringing its total funding to an impressive US$5.3 million. The company’s innovative approach extends beyond disease management, encompassing a data-driven preventive health screening platform deployed across over 120 medical centres in Singapore, Malaysia, and Indonesia.

Besides HealthTech, GreenTech, AgriTech, FoodTech and AI have emerged as bright spots too in SEA funding landscape, especially Singapore. HealthTech has become a focal point of investment whilst GreenTech and AgriTech sectors are also seeing substantial traction.

Final Note

On the whole, Southeast’s Asia healthcare transformation remains promising, owing to factors that include a youthful population, sustained middle-class expansion, increasing health awareness, and continued policy reforms. With increased global life expectancy and research breakthroughs, affordability, and availability of healthcare are the two fundamental challenges startups today are attempting to solve. Investors are keeping a close watch on key sub-sectors such as precision medicine, digital therapeutics, and telemedicine. 

Investors would be wise to take a long-term view of SEA. This is a region which has emerged from every difficult period stronger than before, including COVID-19 in which SEA, especially Singapore, bounced back from the pandemic faster than most of the rest of the world. The resilience and growth of the HealthTech sector could offer investors promising avenues for investment in innovative healthcare solutions.