Pradeep K Jaisingh, Founding Chairman, HealthStart, which runs an accelerator programme for healthcare start-ups, believes it is better for healthcare entrepreneurs to identify a small problem in one geographical area and build a successful business out of it, rather than have mega plans right at the beginning.
The National Capital Region alone, he points out, is the size of Australia. “If you can create a company which just can cater to an NCR or a city like Chennai or Mumbai, you have created a great company. Don’t say I will be a national player, it doesn’t work,” he says. He argues that those with mega ambitions neither have the resources nor the team or structure in place to handle such a large operation. “That is why many of them fail,” he adds. The mortality rate of start-ups in the healthcare domain is higher than in other areas because it requires greater domain knowledge and expertise. It is only recently that medical professionals have themselves turned entrepreneurs or are partnering with those who have experience in the healthcare space, say, from the pharmaceutical industry, to launch ventures.
Started in 2013, HealthStart has completed four batches for start-ups. More than 600 start-ups apply for the programme, when HealthStart takes in just five a year, according to Pradeep. Next year, HealthStart has decided to do two batches a year in view of the demand. Companies such as Intel and IBM have reached out to HealthStart to partner in the accelerator programmes, according to him.
Incubation programme
It is a virtual incubation programme with a set of mentors getting actively involved with the start-ups for the five-month programme. HealthStart focusses on ventures in technology-enabled healthcare, devices, smart sensors, point-of-care diagnostics, chronic disease management, enhancing access to healthcare leveraging technology and taking good quality healthcare to smaller cities and towns.
The start-ups that have gone through the incubation programme include Healthians.com, an online discount and discovery platform that helps patients save costs, and Elth.ai, an artificial intelligence based med-tech start-up that aims to solve health problems discovery and be a 24x7 medical adviser.
HealthStart typically picks up a 10 per cent stake in the start-ups going through incubation and another 2-2.5 per cent for the mentorship, which stake is spread among the mentors. Each company gets one lead mentor and at least one associate mentor and the stake is shared with them.
According to Pradeep, they decided to launch HealthStart Angel Network because a number of start-ups were struggling to raise funds. Many of them, especially those that had not gone through HealthStart’s incubation programme, have either gone with their product to the market or have paying customers. The network invests up to a $500,000, picking up anywhere from 6-7 per cent to 20 per cent stake. It has invested in three ventures so far.
(The article first appeared in The Hindu BusinessLine.)