Padmaja Ruparel Highlights Funding Crisis in India’s Healthtech Sector at Startup Mahakumbh
India’s healthtech sector, once regarded as a booming industry, is currently grappling with a significant funding crisis. At the inaugural day of the Startup Mahakumbh event, Padmaja Ruparel, co-founder of the Indian Angel Network (IAN), highlighted the challenges faced by early-stage healthtech startups in securing capital within the domestic market. She warned that many promising startups are being forced to move overseas in search of better funding opportunities, which threatens the long-term growth and sustainability of the sector.
The Funding Drought in India’s Healthtech Sector
Despite the immense potential of the healthtech sector in India, the funding environment remains hostile, particularly for early-stage startups. In 2024, healthtech startups in India raised only $0.7 billion across 78 deals, a steep decline from previous years. The situation worsened in the first quarter of 2025, where funding totaled just $301 million. This amount was primarily driven by a single deal, Innovaccer’s $275 million funding round. This drop in investments highlights a growing concern for investors and entrepreneurs alike, signaling that the sector’s funding crisis is far from over.
Padmaja Ruparel’s remarks at the Startup Mahakumbh were a call to action for both entrepreneurs and investors to rethink their approach to funding and business development. She stressed that the sector’s promising innovations, especially in deep-tech solutions, are not enough to guarantee growth if they are not supported by a sound financial infrastructure.
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Early-Stage Startups Moving Overseas
One of the key issues facing healthtech startups in India is the lack of domestic capital, which has pushed many startups to look for funding opportunities in foreign markets. Ruparel highlighted that while the Indian government has launched initiatives to encourage startups, there is still a substantial gap in the capital available for early-stage ventures. This gap has forced entrepreneurs to explore opportunities abroad, where they often find more generous funding options and a more conducive environment for scaling their operations.
The increasing trend of early-stage healthtech startups moving abroad is a concerning development. Not only does it mean a loss of innovation within India, but it also results in missed opportunities for domestic investors to support groundbreaking technologies that could transform the healthcare landscape.
The Need for Business and Financial Acumen
Ruparel emphasized that, in order to thrive amidst this funding crisis, healthtech founders must prioritize business and financial acumen alongside their technological expertise. While technical innovation is at the core of healthtech, it is business strategy, financial planning, and sustainable growth models that will ultimately determine the success of a startup in today’s challenging environment.
Healthtech founders need to shift their focus from just developing groundbreaking technology to building scalable, revenue-generating business models. Startups must show potential investors that they are not just innovators, but also capable of managing finances and scaling operations efficiently.
High Capital Demands and Limited Exit Opportunities
Another issue raised by Ruparel was the high capital demands of healthtech startups. Developing healthcare technologies often requires significant upfront investments in research, development, and clinical trials. These costs can be a barrier for many early-stage companies, especially in a market where investors are hesitant to take risks on sectors that require long development cycles.
In addition to capital challenges, healthtech startups in India face limited exit opportunities. The lack of a robust merger and acquisition (M&A) ecosystem and public listing opportunities makes it harder for investors to realize returns on their investments. Without viable exit strategies, investors are less inclined to fund new ventures, contributing to the overall decline in funding for the sector.
Conclusion
The funding crisis in India’s healthtech sector is a pressing issue that demands immediate attention from both entrepreneurs and investors. As Padmaja Ruparel highlighted at the Startup Mahakumbh, the country’s early-stage healthtech startups are in danger of losing their competitive edge if they are unable to secure the necessary capital to fuel growth. To ensure the sustainability of this vital sector, entrepreneurs must embrace both technological innovation and sound business practices. Likewise, investors must recognize the immense potential of healthtech and work together to create a more conducive environment for early-stage startups to thrive. Only through collaboration and strategic investment can India’s healthtech sector rise to meet its full potential and drive meaningful change in the healthcare landscape.
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