Vietnam sees post-Covid surge in healthtech investment

A series of healthtech startups have raised millions of dollars in quick time, showcasing the great post-Covid growth potential seen in Vietnam’s healthcare market, industry insiders say.

Last year, Jio Health, which calls itself leading provider of human-centered, technology-powered healthcare, completed a $20 million Series B investment led by Singapore-based healthcare investor, Heritas Capital. Other investors in the round included Fuchsia Ventures, Kasikorn Bank Group, and existing investor Monk’s Hills Ventures.

It was the largest fundraiser for the company to date and will build on Jio Health’s aggressive growth, with plans to expand its smart clinics and omni-channel ecosystem across its primary market of Vietnam and pave the way for expansion into regional markets over the coming years, the firm said in a release.

Also last year, MED247, a healthtech startup in Vietnam, raised $4.5 million in Series A funding led by Altara Ventures, a Singapore-based firm. The round also drew the participation of Pavilion Capital, MiRXES, and angel investors East Ventures and Venturra Ventures.

Earlier this year, East Ventures, a well-known investment fund in Southeast Asia, announced a $2 million investment in Medigo, the telehealth platform of a Vietnamese startup. Pavillon Capital and Touchtone Partner were also present at the funding round.

The consecutive successful fundraising rounds of healthtech companies in Vietnam underline the huge potential of this segment, market observers say. Apart from some big names, the market has also seen smaller-scale brands with great potential like khoduoconline, YouMed and MedPro.

Huong Trinh, CEO of BDA Partners, the leading sellside investment banking advisor for Asia on cross-border M&A, capital raising and financial restructuring, said that the healthtech industry has become a new investment focus as the demand for online healthcare services is increasing, especially since the Covid-19 pandemic. Recognizing the trend, the Vietnamese government has accorded priority to telehealth and medical record digitalization.

Digital transformation inevitable

Pharmacist Truong Van Dat, vice chairman of the Ho Chi Minh City Young Physicians Association, said that technology 4.0 was increasingly asserting its role in improving the quality of medical services and enhancing patient satisfaction. The application of information technology in healthcare has become an inevitable trend, he said.

Trinh of BDA Partners said that new private healthtech startups like JioHealth, Med247 and eDoctor (telehealth); Insmart and South Asia Services (health insurance claim support services); and Medici and POC Pharma (electronic pharmacies) have successfully raised capital from foreign investors, highlighting growth prospects of the nascent healthtech sector in Vietnam.

"Healthtech is still lagging behind other technology-related fields such as e-payment or e-commerce in both investment level and development progress. Therefore, there is still plenty of room for investors to engage in the process of creating value in the future," she said.

In a report reviewing the retail industry in 2022 and forecasting growth for 2023, top Vietnamese securities broker Saigon Securities Inc. (SSI) said that the healthcare industry was modernizing with the rapid expansion of modern commercial pharmaceutical chains. To improve their health, people were tending to buy functional foods mainly sold at modern commercial pharmacies rather than traditional ones.

According to SSI, a drug shortage is also one of the reasons that have helped modern commercial pharmacies draw customers away from traditional stores that typically lack the bargaining capacity needed to ensure sufficient stocks.

Modern commercial pharmacies are also adapting quickly to the deadline that the Ministry of Health has set for implementing e-prescriptions. For this, pharmacies need to conninect to the national electronic prescribing system, which has proven difficult for traditional stores.

According to the 2022 White Book on Vietnamese E-Business issued by the Ministry of Industry and Trade, Vietnam’s retail e-commerce market size reached $13.7 billion in 2021, up $1.9 billion from 2020 and more than double the figure of 2017 when Vietnam's e-commerce boom began.

The e-commerce market size was estimated at $16.4 billion in 2022. Meanwhile, CBRE Asia has predicted that Vietnam would rake in $25-27 billion from this market in 2025.

At a recent e-payment discussion, Tran Quy, director of the Vietnam Institute of Digital Economy Development, said that the digital economy in Vietnam will account for 20% of GDP by 2025 and 30% by 2030. Healthcare cannot be left out of this development trend and businesses in the field need to quickly grasp the trend and transform themselves, Quy said.