Healthtech startups in SEA find longevity going B2B

Food delivery and ecommerce startups across Southeast Asia have convinced the market to order food through their phones and shop for clothes online. But the same can’t be said for healthcare.

Despite dozens of healthtech providers available, from telemedicine platforms and online pharmacies to diagnostic tests providers, only one in five people in Southeast Asia have used telehealth services, data from consumer research firm Milieu shows.

In the past five years, a number of B2C healthtech firms have quietly ceased operations or pulled out of markets, including Indonesian telemedicine platform Newman’s and Singapore female-health focused firm Ferne Health.

Some struggled to scale, while others found product-market fit during the pandemic only to lose it after movement restrictions loosened.

Common among the few that have survived is the foresight to offer B2B services, which suggests that serving companies on top of customers might be a more sustainable route for healthtech firms here for the long haul.

Not straightforward

Running a consumer-focused healthtech startup isn’t clear-cut. While a typical ecommerce platform would only need to convince a single person to make a sale, healthtech firms have to convince three.

“In healthcare, there are three Ps: the patient, the payer, and the provider,” says Kid Parchariyanon, founder of SeaX Ventures, a Thailand-based VC firm that has invested in healthtech ventures like BotMD. “You have to build trust with multiple people for a transaction to be completed.”

For instance, the patient may not always be the one who pays for a healthcare service. It could be the insurance provider, the government, or a trusted individual such as a family member.

People also use health services infrequently. While a delivery app can offer discounts to encourage repeated usage, telehealth platforms can’t guarantee a return visit the same way.

In addition, a service that finds traction in one market may not necessarily mean it works in another.

Doctor Anywhere, which launched in Singapore as a teleconsultation platform in 2017, was prompted to expand to Vietnam after it saw early traction in the city-state.

The cost to scale

Serving both businesses and consumers

A long game