VCs Eyeing India’s Medical Device Sector for Investment Opportunities
India’s medical device sector is witnessing a surge in venture capital (VC) interest, driven by the country’s expanding healthcare needs and a conducive investment environment.
Recent Investment Trends:
- EQT’s Increased Investments:
- Swedish private equity firm EQT has exceeded its $5 billion investment target in India, investing approximately $6 billion over the past 18 months. The firm is focusing on sectors including healthcare, with significant investments in companies like Indira IVF and AIG Hospitals.
- Meril Life Sciences Funding:
- In February 2022, Meril Life Sciences, an Indian medical device company, secured $210 million from Warburg Pincus to enhance its product offerings and expand globally.
Policy Developments Supporting Investment:
- National Medical Devices Policy 2023:
- The Indian government introduced this policy to foster private investment in the medical device sector. It aims to create an ecosystem conducive to risk-based financing, promoting seed capital and series funding from venture capital funds.
- Abolition of ‘Angel Tax’:
- In July 2024, India abolished the ‘angel tax’ on investments in startups, a move that has been welcomed by investors and is expected to boost funding in the medical device sector.
Venture Capital Firms Engaged in the Sector:
- Inflection Point Ventures:
- Based in Gurgaon, Haryana, this VC fund has made 41 investments in the past 12 months, focusing on early-to-mid stage startups across various sectors, including healthcare.
- Eight Roads Ventures:
- In 2021, Eight Roads launched a $250 million healthcare-focused fund dedicated to India, underscoring its commitment to the sector.
Market Outlook:
The Indian medical device market is poised for significant growth, with projections indicating a compound annual growth rate (CAGR) of 15.7% between 2021 and 2026. This expansion is driven by factors such as an aging population, increasing prevalence of chronic diseases, and advancements in healthcare infrastructure.
The combination of favorable policy reforms, robust market potential, and active participation from both domestic and international venture capital firms positions India’s medical device sector as an attractive destination for investment, promising substantial returns and advancements in healthcare delivery.
