Exclusive: Oyo-like healthcare startup eyes up to $20m series B money

Ayu Health, an India-based healthcare startup, is in talks to raise US$15 million to US$20 million in a series B round by the end of March, co-founder and CEO Himesh Joshi told Tech in Asia.

An Ayu Health hospital / Photo credit: Ayu Health

The startup will use the funding to expand its hospital network in the states of Punjab and Haryana while continuing to develop its technology to serve hospitals and patients across all facets of healthcare.

In September 2021, the company raised US$6.3 million in a series A round from Singapore-based Vertex Ventures and Stellaris Venture Partners. The round also saw participation from some angel investors.

Founded in 2019 by Joshi, Arijit Gupta, and Karan Gupta, the startup is building an Oyo-like model for hospitals in India.

The trio had earlier established Zefo, an online marketplace that specializes in selling refurbished TVs, mobile phones, and furniture. In April 2019, they sold the firm to Quikr in a US$26.7 million all-stock deal.

Building the Oyo of hospitals

After the Zefo acquisition deal was wrapped up, Karan decided to go back to his hometown and help his parents – both doctors – to scale their 100-bed hospital in Panchkula, a town in the Indian state of Haryana. The hospital was not giving the returns that Karan’s family expected.

After discussing the matter with his fellow Zefo founders, they soon realized the white space in the healthcare market. “While technology and the internet have fundamentally transformed commerce, entertainment, and education in the past 10 years, the experience of going to a hospital largely remains the same,” says Joshi. The biggest intervention has happened around doctor consultations, he added.

With these insights, they decided to look deeper into the hospital sector. While India has more than 69,000 hospitals, they noted there are just around 10 branded hospital chains such as Apollo, Manipal Health, and Fortis.

Ayu Health co-founders (from left) Karan Gupta, Himesh Joshi and Arijit Gupta / Photo credit: Ayu Health

The co-founders realized that several of the standalone hospitals have good infrastructure and protocols in place as well as trained staff. However, they couldn’t differentiate themselves from others or create their own brand, so most of these hospitals run only at 30% to 40% utilization, noted Joshi.

These findings led to the birth of Ayu Health in October 2019. Once a hospital comes under the Ayu network, the startup uses digital channels to market them, creates a centralized operating system for the hospitals’ use, and digitizes the processing of health insurance.

For a more transparent offering, Ayu Health also  formulates standardized price packages for several procedures, irrespective of the number of days or number of consultations a patient has to take. Doctors take care of the clinical part of the procedure, while Ayu Health accounts for the operation side.

More hospitals to join the network