When racing car engineer Mudit Dandwate nearly lost an uncle to undiagnosed sepsis in an Indian hospital, he made it his mission to improve patient monitoring in the country of 1.4 billion.
Dandwate, a consultant to sports carmakers such as McLaren at the time, decided to apply his experience with race cars to healthcare. He and a fellow engineer began working on a project to use the kinds of sensors used in Formula 1 cars that can monitor body’s micro-vibrations to map health metrics in non-intrusive ways at hospitals.
“We use a lot of sensors, analytics, artificial intelligence [AI] to assess the health of a car,” Dandwate, 33, said in an interview. “And that’s where my race car-engineering background helped because we used some of the same methods to develop a sensor-based contactless patient monitoring system.”
Hospitals across India—as in much of the world—are often understaffed and doctors and nurses are overworked, resulting in small delays in patient care that can lead to life-threatening complications. Dozee is one of hundreds of health-tech firms looking to use AI and other cutting-edge technologies to fill chronic, structural gaps in healthcare delivery in the world’s most populous nation.
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From private equity giants like TPG Capital to the investment arms of big pharmaceutical firms like Novo Nordisk A/S, investors have bet a combined $3.7 billion on Indian health-related startups since 2022, according to data aggregator Tracxn Technologies Ltd. This is half of the $7.4 billion that health tech-focused firms have raised across the Asia Pacific region, according to Tracxn.
Bain & Co. expects healthcare innovation in India to be a $60 billion opportunity by 2028, dominated by pharma services and health-tech.
Surviving COVID-19
Despite the country’s potential, at least 170 Indian health-tech startups have gone out of business since 2023, according to Tracxn data, as the world emerged from Covid shutdowns. Many of those that survived have seen their valuations drop significantly. Most startups now see expanding at home and tapping more lucrative overseas markets as the two main pathways to scaling operations and one day turning profitable.
The global COVID-19 pandemic and the related movement curbs spawned a wave of healthcare startups seeking to replace in-person engagements with online services, such as online pharmacy PharmEasy. Many of them are now facing valuation cuts as investors gravitate toward companies with a hybrid model aiming to plug the gaps in India’s health infrastructure.
“India has 7.3 physicians per 10,000 people, compared to a world average of 17.2, according to WHO data. This scarcity is more severe for specialist doctors, especially in rural areas which fall short of the needed numbers by 80 per cent.”
Co-founded by Dandwate in the tech hub of Bengaluru in 2015, Dozee is valued at about $150 million. The company uses two sensor sheets placed under mattresses as an early warning system to detect cardiac, respiratory, sleep, and other vital signs.
The sheets capture patient data every second with 98 per cent accuracy, Dandwate says, easing the workload of hospital staff, and improving real-time observation. The company charges fees of more than Rs.5,00,000 ($5,947) for integration of its smart beds into a hospital’s administrative software, and its products are used in more than 16,000 beds across about 250 hospitals in India and another 55 in the US.
Having raised $35 million so far, Dozee plans an additional funding round in six months to finance its expansion in the US, Dandwate said. Such technology-backed healthcare allows people to ensure that a “limited resource of highly-skilled world-class experts are now more democratically used”, said Mohit Bhatnagar, managing director at venture firm Peak XV Partners, formerly known as Sequoia Capital India & SEA.
Acute scarcity
India has 7.3 physicians per 10,000 people, compared to a world average of 17.2, according to data by the World Health Organization. This scarcity is more severe for specialist doctors, especially in rural areas which fall short of the needed numbers by 80 per cent.
“It is a global phenomenon that you have a provider shortage,” said Carl Byers, a partner at Fidelity Investments-backed F-Prime Capital. “I think it’s particularly acute in India, especially outside of the tier-one cities.”
Dhruv Joshi and Dileep Raman, two intensive-care experts formerly at Cleveland Clinic in the US, moved to India to set up Cloudphysician—a firm that enables remote monitoring of hospital intensive care units across India through their team of about 120 doctors and nurses that work out of Bengaluru. The firm which, raised $10.5 million in June, works with hospitals across 23 States in India—from Mumbai to the tiny city of Deoghar in Jharkhand.
Reducing ICU stay
Paramount Hospital, a small 40-bed health centre in northern Mumbai, is one of CloudPhysician’s partners. With a five-bed ICU, and patients mostly from lower- or middle-income background, Paramount did not have the money to hire full-time critical-care specialists, its owner Utkarsh Angachekar said.
Paramount was earlier not hospitalising “patients beyond a certain level of criticality and let them go to a centre where there is better monitoring”, said Angachekar, recalling the situation when the hospital approached CloudPhysician. “Now, it has led to a increased level of confidence on the consultants who treat higher levels of criticality at our place,” he said.
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The results are evident: the average stay for a patient at Paramount’s ICU has dropped to three days from five days a year back when it was not using CloudPhysician.
The combination of India’s infrastructure shortfall and a rapidly developing economy means there is no shortage of these types of startups. Bengaluru-based Qure.ai, which raised $65 million from investors including Merck & Co.’s global health innovation fund in September, uses AI for early diagnosis of conditions such as stroke and lung cancer. TPG backed-firm Asia Healthcare Holdings has helped treat 1,300 babies in smaller towns through its remote neonatal ICUs.
Turning profitable
“In the case of India, technology is the reason we are able to profitably serve customers at the price points that they can pay,” said Bhatnagar at PeakXV. “Eventually, technology will enable a better medical outcome and that’s what will win.”
Founders are hoping that tens of millions of new internet users and a rapidly growing middle class will boost their customer base, and eventually help them break even. Some like CloudPhysician and Dozee are also expanding overseas to higher paying markets like the US and the Middle East, to boost their margins as they keep prices low in India.
“You build such strong technology that you compete in the global marketplace,” said Ashwin Raguraman, co-founder of Bharat Innovation Fund.