India’s health care sector has long been seen as a sleeping giant. Over the last decade, it has begun to stir — and now, in many ways, it is fully awake. Between 2022 and 2025, the sector attracted over $20 billion in cumulative investments across private equity, venture capital, and mergers. Hospitals, diagnostics, biotechnology, insurance, and digital health all drew significant interest, with 2023 marking a peak year, recording more than 330 deals.
Yet, amid this optimism, cracks have also appeared. During the same period, over $600 million in capital was eroded across more than 40 health care startups — a stark reminder that capital alone doesn’t guarantee value, especially in a sector where trust, outcomes, and long-term viability matter more than speed.
This duality reflects a deeper truth about healthcare in India. The opportunity is real — and massive. But it cannot be unlocked without a nuanced, responsible approach. Health care is not another category to be ‘disrupted.’ It is built on systems, trust, and outcomes. It demands time, domain expertise, and integrity.
Over the past few years, the rush to digitise health care led many startups to chase scale before substance. Some tried to apply e-commerce tactics to clinical care. Others focused on front-end apps without integrating with back-end systems like hospitals, insurance networks, or government schemes. For a while, the excitement was contagious. But cracks soon appeared — unsustainable burn rates, weak user retention, regulatory missteps, and, most crucially, a lack of real-world impact.
These failures have not deterred capital — but they have redirected it. Today’s investors are asking tougher questions. They are less dazzled by growth curves and more interested in alignment with public health infrastructure, regulatory readiness, and evidence of long-term value. They’re seeking business models that reduce health care burden, not just digitise access. They’re choosing steady execution over startup theatre.
That shift is visible on the ground. In smaller cities and towns, there’s growing appetite for mid-sized hospital models — not sprawling institutions, but well-run 50 to 100-bed facilities that serve regional populations with quality care in specialties like maternal health, dialysis, or oncology. These are pragmatic builds: manageable capital expenditure, reasonable breakeven timelines, and strong community impact.
In insurance, the conversation is changing. The future isn’t just selling more policies; it’s about risk scoring, claims intelligence, and smarter underwriting. There’s increasing interest in bundles that track patient outcomes, preventive care incentives, and actuarial models that reward healthier behaviours. The rise of digital health IDs and linked insurance records offers new potential — if we get the execution right.
Even in digital health, the tone is more grounded. Investors are focusing on startups that integrate into existing systems — school screening programmes, primary health check-ups, maternal monitoring tools, and AI-based triage systems that actually support care delivery, not just digital engagement. Rather than standalone apps, the emphasis is shifting to tools that work within state and national frameworks.
Biotech, too, has become a space of disciplined optimism. India’s bioeconomy has more than doubled in four years — from $86 billion in 2020 to $165 billion in 2024 — and is projected to reach $300 billion by 2030. This growth is anchored not only in research and development (R&D) but in real manufacturing muscle, global market integration, and the ability to serve emerging and regulated markets alike.
All of this points to a maturing ecosystem. One where depth matters more than dazzle. Where pilot success means actual adoption, not vanity metrics. And where the most enduring ventures are those led by teams that combine clinical credibility with business acumen.
The role of domain experts has never been more important. Healthcare founders need to surround themselves with clinicians, public health specialists, and policy advisors who understand how the system functions. Investors need to engage medical boards, legal counsel, and compliance strategists before deploying capital. This is no longer optional — it’s fundamental.
Because ultimately, health care is not just about delivering returns. It is about delivering outcomes. And in India, those outcomes can be transformational — for communities, for livelihoods, for national resilience.
There is every reason to remain optimistic. The underlying drivers of demand are strong: A rising middle class, rapid urbanisation, better insurance penetration, and growing awareness of preventive health. Government support continues to play a catalytic role — whether through incentive-linked manufacturing, Ayushman Bharat, or bio-innovation grants.
What’s changing now is the lens. We’re moving from excitement to evaluation. From speed to substance. And in doing so, we’re setting the stage for a far more sustainable health care economy.
India doesn’t just need more health care companies. It needs the right ones. Built with care, governed with discipline, and scaled with a clear understanding of what’s at stake. That’s how the next phase of this sector will be shaped — not by volume, but by value.
And that’s where the smartest money will go.
This article is authored by Sabine Kapasi, MD & CEO and Ashish Panghal, partner, Enira Consulting.
