Author Vihaan Mehta | Published :
Indian healthtech startups are seeing VCs rethink investments. Deal volumes dropped significantly, with sector rankings slipping. PharmEasy, a major player, suffered a drastic 90% valuation cut. Despite projected market growth to $37 billion by 2030, investor focus has shifted away from broad healthtech platforms towards AI, deeptech, and execution-led solutions with proven impact.
Investor Sentiment Shifts
The shift in investor sentiment is evident in the declining deal numbers. According to Inc42’s ‘Annual Indian Startup Trends Report, 2025’, the healthtech market is projected to grow at a 39% CAGR, but the sector is no longer an investor darling. The number of deals declined from 78 in 2024 to 54 deals last year, causing the sector to plunge from fourth to eighth in funding rankings.Valuation Challenges Emerge
While the total funding amount remained steady around $700 million, a closer look at major deals reveals significant challenges. Health data platform Innovaccer secured $275 million in a Series F round, one of last year’s largest. However, online pharmacy startup PharmEasy raised $192 million, primarily as debt, struggling with cash burn. It also underwent a steep 90% valuation haircut, falling to $456 million from a peak of $5.6 billion.Seed and Growth Stage Slowdown
Early-stage investment data shows healthtech missing the top five sectors for active investors. Although Karan Bajaj’s Complement raised $16 million in seed funding, healthtech overall ranked fifth in seed stage investments with 35 deals, a decrease from ten years ago. Growth stage funding also saw healthtech fall out of the top five, a stark contrast to 2015 when it attracted $231 million.AI and Deeptech Draw Focus
Investors are now more attracted to AI and deeptech startups, with enterprise software and e-commerce remaining popular. Fintech leads growth stage funding with over $1.4 billion deployed. This redirection of capital impacts healthtech’s ability to secure early and growth stage funding.Late-Stage Resilience and New Funds
Late-stage healthtech funding saw an increase from $400 million to $600 million, though it fell out of the top five in deal volume, indicating selective investor interest. Ravindranath Kancherla of Global HealthX noted that investing has moved from “idea-led to execution-led,” demanding proven adoption and measurable impact.Despite the broader slowdown, 16% of new funds launched in 2024 focused on healthtech, making it the third most targeted area. Funds like W Health Ventures ($70 million), Quadria Capital ($300 million), and HealthKois ($300 million) are still channeling capital into the sector, signaling continued, albeit more cautious, investor belief.
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