Start-ups are Disrupting the Medical Tourism Space. Here’s How

Jahid Hasnat, 64, was in a fix. The Dhaka resident, who was suffering from cardiac and urology-related ailments, couldn’t decide where to travel to for treatment. Medical facilities in Bangladesh were not up to the mark and an earlier visit to Singapore had burnt a huge hole in his pocket. India was an option, but a previous visit had resulted in a bitter experience.

He approached Dhaka office of HealthTrip, a Delhi-based start-up specialising in medical tourism in India. “A person picked us up at the airport and assisted us in getting a hotel and finally the hospital appointments and tests,” says a relieved Hasnat. “Everything was smooth and much better than our previous trip when we didn’t know where to go after landing in India,” he says, adding that the start-up offered him an all-in-one package.

Hasnat isn’t alone. As many as 495,056 people visited India for medical treatment in 2017, says government data. While the latest statistics are not available, government data for 2020 shows that Bangladesh accounted for nearly 55 per cent of all foreigners coming to India for medical purposes. It was followed by people from Iraq, Maldives, Afghanistan and Oman. Globally, the medical tourism market is booming. According to a report by research firm Global Market Insights, the size of the market globally was over $10 billion in 2020 and set to grow at a CAGR of more than 12 per cent to breach the $37 billion-mark by 2027. It is no wonder that start-ups have spotted the opportunity and jumped in.

A booming segment

But what is medical tourism? Simply put, it refers to the practice of people travelling to other countries for medical treatment. Turkey, India, Thailand and the UAE are among the popular destinations, say industry sources. India scores high because of its cost advantage while providing high-end facilities for all kinds of treatment ranging from cardiology to neurology to bariatric and even transplants. India was ranked 10th among 46 nations on the Medical Tourism Index 2020-21, released by independent information provider MedicalTourism.com; Canada, Singapore and Japan were the top three nations.

The government, too, is aware of the potential of medical tourism. While speaking at the inaugural session of the Global Ayush Investment & Innovation Summit 2022 in April at Gandhinagar, Prime Minister Narendra Modi said that the government would soon introduce a special Ayush visa category for foreigners who want to come to India for traditional medical treatment.

While medical tourism has always been a vibrant segment in India, the entry of start-ups has made it more competitive with such ventures offering convenient end-to-end solutions.

From start to finish

“There is no proper planner for those who travel for medical treatment even though the process involves so many different things,” says Danish Ahmed who along with fellow Co-founders Suneel Kapur and Obaidullah Junaid started HealthTrip—formerly known as HosPals—in 2019. HealthTrip claims to have served nearly 30,000 patients across 38 countries by partnering with 130 hospitals and over 1,000 doctors.

This start-up, like its peers in the segment, offers services that cover the entire gamut of medical tourism, of which finding the right hospital and doctor is just one part. This is how it typically works: Start-ups tie up with hospitals and doctors and list them on their platform with vital details like fees and credentials, among other things. This helps patients and their families to understand their experience and expertise while also giving an idea of the costs involved. Medical tourism, however, involves travel, stay, visa, financial aid and, at times, translators, drivers, cooks and house helps; these start-ups have tied up with all such service providers so that they can offer customers an all-inclusive package.

The scope of growth in the segment can be gauged from the fact that there are nearly 60 such start-ups in the space and while cities like Delhi, Mumbai, Bengaluru and Gurugram account for the largest share, such ventures are also present in smaller towns and cities such as Malappuram, Mangaluru and Palwal, as per data from Tracxn.

“As an industry grows bigger, it catches the attention of smart and tech-savvy entrepreneurs about how they can catch up with someone who has been running the business through traditional means for 7-10 years. That’s exactly what is happening in medical travel now,” says Pankaj Chandna, Co-founder of Vaidam, a Gurugram-based medical tourism start-up.

Even within the segment, some have found a niche by focussing on a particular treatment. For instance, Meditourz specialises only in regenerative and holistic treatments and has tied up with wellness centres that focus on Ayurveda and yoga, among other things. “We take care of patients’ full rehabilitation with nutrition while also ensuring that they don’t have to stay back in India for long,” says Aashnee Gajaria, Co-founder of Meditourz. Till date, the Mumbai-based start-up has organised over 40 workshops across 18 countries while focussing on the markets of Asia, Southeast Asia and the Middle-East.

Strong growth numbers

If the growth in business volume is anything to go by, then start-ups in this space are having the time of their lives. Since travel was banned for the most part of 2020 and restricted the following year, these start-ups have been seeing real business only in the last one year or so; since then, there has been an explosion in their growth numbers.

“We have grown nearly 12 times in terms of revenue between July last year and now. Due to the pandemic-forced restrictions, there was hardly any travel in 2020 and also till mid-2021 and that created a huge backlog of patients. We are expecting 100 times growth in the next five years,” says Ahmed, adding that his start-up’s annualised revenue has already touched $10 million.

Vaidam says its growth was in multiples of hundred right from the word go. “We have been fortunate to have experienced multi-fold growth since we started. We grew 400 per cent in the second year of our operations followed by 250 per cent in the third year and 200 per cent in the fourth. Then the pandemic happened. Even then, we did multiple new initiatives to keep going and building on our strengths,” says Chandna whose venture has assisted more than 25,000 patients to reach out to over 400 hospitals and 7,000 doctors.

In terms of revenues and profitability, the segment does not have a typical cash burn model as these start-ups earn a commission from either the hospitals or the doctors on every case they facilitate. While exact numbers are not available, sector players say that monthly revenues running into a few lakhs are easily achievable from the first year and given the low-cost structure and funding, profitability is not a difficult target. This is also a reason why, barring a few, most start-ups in the space are still bootstrapped, though in terms of valuations none are close to becoming a unicorn as of now.

The segment has attracted interest from marquee investors. Early-stage institutional investors like IPV, Amity Capital Ventures, Venture Catalysts, Wavemaker Partners, Spiral Ventures, Axilor Ventures and LetsVenture have invested in such start-ups.

Well-known angel investors including Kunal Shah of Cred, Deepinder Goyal of Zomato, Nirav Panchmatia of AUM Financials and Gaurav Singhvi of We Founder Circle have also put money into such ventures.

It may be boom time for these start-ups, but what’s in it for hospitals? “The ecosystem created by these start-ups is very important for hospitals because they are able to reach a larger group and these ventures act as the extended business development arms,” says Shaaz Mehmood, Director of MediJourn, a strategic partner of Apollo Hospitals. “Medical tourism start-ups bring in a lot of value-added services which the hospital cannot, like providing the patient with choice of treatment apart from helping them with paperwork, visa, travel, forex, etc.,” he adds.

Strong vitals ahead

What is fuelling this growth? Apoorva Ranjan Sharma, Co-founder of 9Unicorns & Venture Catalysts, says that the rise of medical tourism start-ups is due to a combination of factors, including supportive government policies, high-quality medical facilities in the country and profitability potential.

“These start-ups are going to further accelerate the growth of the Indian healthcare ecosystem in the next few years and there are high chances of them growing profitably too since this segment is a low cash-burn business,” says Sharma who has invested in this segment.

According to the government, medical tourism in India has huge scope due to a combination of factors including trained doctors/surgeons—many have experience of studying or working in the US or Europe and are also fluent in English—and a huge workforce of trained nurses—there are as many as 1,000 recognised training centres with 10,000 nurses graduating annually.

It appears that medical tourism start-ups are showing a strong pulse for now with their vitals only getting stronger with each passing day.

@ashishrukhaiyar