Report: APAC Healthtech Posts Its Largest Year of Funding
2018 was a blockbuster year for Asia-Pacific healthtech, according to a new report by Galen Growth Asia.
“Asia HealthTech closed the year at a record breaking US$6.3B, confirming it as the 2nd largest digital health ecosystem in the world,” writes Julien de Salaberry, CEO and founder of the Singapore-based healthtech research and advisory firm.
Funding in 2018 broke through all previous records; it was 1.5 times that of 2017 and was double that of the year before. It was spread through a slightly lower number of deals – 294 – though that only means that deal size have been growing, with mega deals happening more often:
Asia Pac HealthTech ventures experiences another year of mega-deals, recording 16 rounds of US$100M or more. Mega-deals account for 60% of total funding in FY2018.
Mammoth exit deals were also prevalent, with IPO and M&A type deals “growing to it’s largest volume in history” and accounting for 31% of deal value. Deal sizes was nothing to sneeze at either, with Ping An Good Doctor’s IPO – the region’s largest healthtech offering – coming in at $1.1 billion.
Galen Growth cites three main drivers behind the funding boom:
Investor appetite for Growth stage ventures, which continues to strengthen, is driving share for this deal type up 14% over the previous year. This sentiment is underpinned by a more permissive policy and regulatory environment across a number of key markets in the region, including China, India and Singapore, and growing involvement by strategics such as pharmacos.
And it expects the region’s healthtech space to continue booming in the near future, though not without caveats:
Galen Growth Asia expects the Asia Pac HealthTech ecosystem momentum to continue to build driven by the 2018 key drivers, but a number of headwinds exist which should be borne in mind. As we kick-off 2019, the geopolitical uncertainty witnessed in 2018 appears to remain unchanged in the short term. We however expect China to remain dominant with the government’s push of its ambitious “Made in China 2025” and a reported US$850B of funding to be deployed. However, this is too much capital chasing too few ventures building quality issues down the road. As India’s investment scene builds impressive momentum, there are concerns that the Indian government “angel tax” which remains unamended despite government assurances will create a seed funding drought.
Photo: Michael Elleray