Indian VCs Narrow Healthtech Bets Amid Selective Optimism

Healthtech Funding Holds Steady as Deals Shrink

India’s healthtech sector is in a transition phase, with headline funding holding up even as investor enthusiasm cools from COVID‑era highs. According to Inc42’s ‘Annual Indian Startup Trends Report, 2025’, total capital deployed in healthtech remained around $700 million last year, roughly flat versus 2024. However, the number of deals fell from 78 in 2024 to 54 in 2025, pushing the sector down the rankings of investor focus from fourth place to eighth.

The decoupling of deal volumes and dollar flows reflects a market where a handful of large transactions are sustaining aggregate totals while activity thins out elsewhere. During the pandemic, platforms such as PharmEasy, Practo and Tata 1mg were major capital magnets amid booming telemedicine and e‑pharmacy usage. That wave has receded, with companies now returning to a customer‑first approach and integrating technology more deeply across the healthcare ecosystem.

Despite short‑term softness, Inc42 projects the Indian healthtech market to grow at a 39% compound annual growth rate from 2025, breaching the $37 billion mark by 2030. This growth expectation underpins continued, but more selective, investor interest as the sector moves from rapid experimentation toward more disciplined scaling.

Big Rounds Mask Early and Growth Stage Weakness

A closer look at 2025’s funding composition shows how a few marquee rounds supported overall healthtech investment. Health data platform Innovaccer closed a $275 million Series F round in January, the fourth‑largest startup round in India last year. Online pharmacy PharmEasy secured a $192 million debt infusion as it worked to control cash burn and address existing liabilities, accepting a steep 90% valuation haircut to $456 million from a peak $5.6 billion.

These late‑stage transactions helped lift total capital deployed even as early and growth‑stage activity fell away. Healthtech dropped out of the top five sectors for early‑stage investors in 2025, closing just 35 seed deals compared with 47 a decade earlier when it ranked fourth by seed‑stage activity. At the growth stage, the sector also no longer features among the top five, in contrast to 2015 when it raised $231 million at that phase.

An exception in the early‑stage landscape was Complement, a personalised lifestyle coaching startup for cancer patients founded by WhiteHat Jr founder Karan Bajaj. Its $16 million seed round was the third‑largest early‑stage fundraise of 2025, underscoring that investors will still back focused, differentiated health offerings even as they pull back from broad‑based bets.

Investors Pivot to Execution and Proven Impact

Market data suggests investors have become far more selective about the type of healthtech they finance. “Healthtech investing has moved from idea‑led to execution‑led,” said Ravindranath Kancherla, founder at Global HealthX and Global Hospitals. He noted that five years ago, investors backed broad platforms and pilots, whereas today they look for solutions with proven adoption, repeat usage, and measurable clinical or operational impact.

The shift is reinforced by broader venture trends. Early‑stage investors are increasingly captivated by AI and deeptech startups, while enterprise software and ecommerce remain popular categories. At the growth stage, capital has flowed toward more established verticals such as fintech, which saw more than $1.4 billion deployed in 2025, with ecommerce and enterprise technology also attracting attention.

Within healthtech, investors appear to be concentrating capital in companies that can demonstrate real‑world outcomes and tighter integration into healthcare workflows rather than funding a long tail of experimental models. This dynamic helps explain the divergence between stable funding totals and shrinking deal counts.

Late‑Stage Capital and New Funds Signal Enduring Interest

The data shows late‑stage healthtech funding was comparatively resilient last year. Capital deployed at this stage rose from $400 million to $600 million in 2025, even as the number of late‑stage deals fell and the sector dropped out of the top five by deal volume. The pattern indicates that investors continue to back the sector, but are doing so with larger cheques into fewer, more mature companies.

At the same time, new health‑focused venture funds are coming to market, suggesting that limited partners still see long‑term opportunity. Some 16% of all new funds launched in 2025 were dedicated to healthtech, making it the third most targeted sector after deeptech and fintech. Overall, the new fund corpus reached $13.6 billion last year, up 56% from 2024.

Recent examples include W Health Ventures’ $70 million Fund II, Quadria Capital’s $300 million HealthQuad Fund III and a $300 million vehicle raised by HealthKois. According to Kancherla, capital will increasingly back startups that integrate seamlessly into healthcare workflows, expand affordability and access to care, and selectively apply frontier technologies such as embodied AI and quantum computing where they can deliver scalable healthcare outcomes.

Pankaj Jethwani, managing partner at W Health Ventures, expects more venture money to flow into care models in aesthetics and wellness, indicating that investor interest is not confined to traditional clinical or hospital‑centric offerings but is broadening to adjacent segments of consumer health.