Saturday, Dec 03, 2022

W Health Ventures Invests In Healthcare Startups That Address A Large Unmet Need

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W Health Ventures Invests In Healthcare Startups That Address A Large Unmet Need

W Health Ventures is a Boston-based venture capital firm that backs early-stage healthcare companies that are disrupting care delivery in the US and India. 

Dr. Pankaj Jethwani, Executive Vice President, W Health Ventures
Dr. Pankaj Jethwani, Executive Vice President, W Health Ventures

Excerpts from an interview done with Dr. Pankaj Jethwani, Executive Vice President, W Health Ventures are shared below:

W Health has committed to invest $100 million fund in India and US healthcare. How much of the fund has been deployed?
Since 2021, we have deployed 25% of the fund across India and the US. 

What are some of your recent investments and why did you invest in them?
We have invested in 8 companies across India and the US. Our most recent investment was in a pregnancy and parenting platform, Mylo. Along with the incredible opportunity to reduce the often-ignored problems of the 25 million women that become mothers every year in India, what instills our belief in Mylo is its innovative and well-executed business model built around a highly engaging content and community platform. This platform helps Mylo gain unparalleled consumer insights into what they need, and provide affordable, great-quality products and healthcare services. 

Our most recent investment in the US was in a musculoskeletal pain management company, Kins. Kins has the potential to impact the 126 million Americans who need physical therapy. It is providing them with a straightforward solution comprising a 1:1 session with a qualified PT within 48 hours of booking and the session is at the patients’ home or online. What further motivated us was the improvement in patient adherence and outcomes among patients served by Kins. 

What’s the criteria for you to invest in a healthcare/healthtech startup?
While the criteria differ for each sub-segment within healthcare, some of the must-haves for us are:
●    Addressing a large unmet need in healthcare. Through our investments and incubations, we aim to positively impact 100 million lives in India. 
●    Proven success in improving clinical outcomes for patients
●    Strong unit economics. While it is natural for startups to have high burn in the early days, we ensure that each of our portfolio companies has strong fundamentals with high gross margins, capital efficiency, and a path to profitability 

We will continue to back mission-driven founders and companies that are on the right side of healthcare innovation.

What differences do you see in the Indian investment in healthcare and healthtech industry viz-a-viz the US landscape?
The Indian healthtech startup ecosystem remains at a nascent stage compared to the US. Due to the differences in stage and insurance coverage, investors in both geographies invest in different types of companies with respect to go-to-market strategy, business model, and offering. 
●    Go-to-market strategy: Leading startups in the US are B2B or B2B2C models selling via employers and payors. In India, this is vastly different with most startups selling D2C through performance and brand marketing. 
●    Business Model: Healthtech innovation in India is synonymous with tele-health and e-pharmacies while more comprehensive interventional care models remain at a nascent stage, unlike in the US where vertically-integrated platforms and value-based care models are seeing rapid growth and investor interest..
●    Innovation in non-traditional healthcare problems: payors in the US cover a variety of therapeutic areas not covered by payors in India. For instance, OPD, physical therapy, remote patient monitoring, and mental health. Thus, founders have found it possible to innovate in a large number of clinical areas. 

What kind of changes do you observe in healthcare delivery and the industry over the years? What new technology is being leveraged?
Over the last decade, we have steadily seen care move out of hospitals and closer to the patients’ homes using technology. Propelled by the pandemic and increased digital penetration, care is reaching patients’ houses through teleconsultation models, mobile apps helping deliver care programs, use of IoT devices to track vitals, diagnostics at home, and rapid self-diagnostic tests. 

The increasing uptake of digital health among consumers has been supported by the adoption of technology by doctors and healthcare institutions in the form of electronic prescriptions, social networks for doctors, and communication with patients through WhatsApp integrations. 
While there is a long way to go, we are seeing the adoption of new technology in various areas such as mental health, radiology, surgery, etc. Wysa, a mental health startup, has created an emotionally intelligent AI chatbot to bridge the gap between people who seek mental health care and providers. Multiple startups like QureAI, and Aidoc are building AI models that can support radiologists in reading scans faster and more accurately. The use of virtual reality to train for surgeries is helping providers prepare for new procedures, reduce wet lab costs and upskill themselves. 

What trends do you feel would redefine healthcare in the next 5 years?
●    Sector verticalization- Over the last few years, we have seen the growth of vertically-integrated platforms providing end-to-end solutions for particular healthcare problems come up. This trend will continue and will also lead to innovative solutions being created for the traditionally ignored healthcare problems like menopause, infertility, cancer, pain management, etc.  
●    Business Model Innovation- Most digital health startups in India today are aggregating service providers. As the ecosystem matures with an increase in consumer healthcare spending and insurance coverage, we expect traditional and new-age healthcare companies to work closely together as well as newer business models emerge In health tech. 
●    Decentralization of care- The next five years will further push care outside healthcare institutions in Tier 1 cities to Bharat, with many startups focusing on bridging the rural-urban medical divide, this will also be driven by the uptake of innovative technology by traditional healthcare providers like hospitals, and doctors. 
In the next five years, we believe digital health companies will demand greater adoption both by the providers and patients to become large household brands.