Lack Of Adequate Strategic Capital Haunting Healthcare Startups In India: SteerX Founder

The overall healthcare market in India is poised to reach $320 billion by 2028, and specifically, innovation in this sector is projected to nearly double to $60 billion by the same period, from the current value of $30 billion. Under such growth trajectory, the investment attracted by the sector, especially by innovators in healthtech is paramount. As of first half of 2024, the total cumulative funding attracted by healthtech startups in India has surpassed $9.9 billion.

Healthcare remains a complex sector for investors unfamiliar with its nuances. Leveraging over two decades of experience and a robust global network, Gurugram-based SteerX — a healthcare-focused angel fund — aims to scale innovative healthcare startups across geographies through comprehensive support. In conversation with Bizz Buzz, Lalit Singla, CEO and Founder, SteerX, delves into the opportunities and challenges that healthcare startups in India are facing today

What are your insights about innovation in the healthcare industry after being associated with it for over two decades?

After working in the US healthcare industry for 23 years I have seen the potential that the sector presents as well as the challenges the sector faces in general. There is a lot of innovation that happens across the country but some of these innovations find the light of the day and are able to make significant difference while other innovations that are equally compelling do not enter the market due to the lack of strategic capital, expert guidance and mentorship, domain driven support to take them ahead and implement in a way that they are useable by people and doctors.

What is the driving force behind founding SteerX?

The idea of SteerX is to ultimately bridge that gap. The funding platform led by leaders in the sector who have seen both, the challenges and opportunities are coming together and powering startups. This presents an opportunity that is missed out today. We have identified broadly four areas of focus where these startups are making a difference – are they significantly reducing the cost of care, are they making an impact in terms of improving access to care and make it reach the areas where it doesn’t reach today, does it lead to better health outcomes for people wherein it helps them treat better, treat smarter, detect earlier in a way that the care is actually scaled in every remotest of the areas, and lastly, are the startups creating products and solutions that are significantly going to have the experience of patients and providers or doctors, leading to an efficient ecosystem.

What is the fund size and how many startups will SteerX support?

SteerX was founded in 2024 and in February 2025 we received SEBI registration for Category-1 Angel Fund. We have a strong pipeline of 200 startups that has been sourced from some of the leading incubators in the country, other VC partners, investment bankers, and also there is significant inbound interest that our LinkedIn page has generated. With our fund size we are looking to support atleast 30 companies over the next three years. Our fund size is Rs 100 crore and we have a Greenshoe option to double it depending on the response we get. Our cheque size will be between Rs 50 lakh – Rs 5 crore depending on the size of the startup and their capital need. We will look for startups that are in early stage all the way up to Series A. We will lead or co-lead the pre-seed and seed funding rounds, while we are contributors to pre-Series and Series A, working with other investors. We will select startups that are solving a significant problem in a large scale market and building with strong differentiation and IP, besides demonstrating their product and solution with early traction in the market. The founding team has to be driven by conviction - there is clarity of purpose and there is grit to go the distance - we want to back such teams.

Besides investment, what is the end-to-end support that SteerX will be providing?

Beyond investment, we are bringing in investors who are strategic LPs (limited partners) with years of experience in healthcare. Leveraging our strategic LP network we will bring expert mentorship and growth, we will provide industry access and strategic partnership to our partners and we will also enable global market expansion for startups helping them improve unit economics for the ones that have a product or service that is relevant for global markets.

How many people have you onboarded till now?

We already have 20 people in the group and our target is take it to 50, that will include industry experts, venture partners and investors, in the next one year. We will onboard people who are keen about healthcare, including the CXOs, medical doctors, founders and professionals who want to come in and make a difference. We are also interested in onboarding few healthcare companies especially the SMEs. We can partner to build custom portfolio of innovation for them that aligns with their core business.

Hyderabad is known as the Pharma hub. What is the nature of partnership with this city?

Hyderabad is one of the big hubs of healthcare. We have strong network of people from Hyderabad who are part of everything. I was in the city last month and we had series of meetings with hospitals, rehab centres, industry leaders. We are also deeply engaged with ISB and IKP. So, Hyderabad is on top of our agenda and we are looking forward to back the innovations that are happening in this city as well. There are multiple startups in our pipeline that have come from Hyderabad.

Which are the core areas of innovation that SteerX will be interested to invest in?

We have defined six broad themes that we will prioritise, but it doesn’t mean these are the only themes we will invest in – the innovative care and delivery service models, next generation diagnostics and treatment, digital health and AI, smart and connected medical devices, biotechnology and life sciences, and lastly, healthcare fintech.

How will SteerX take its startups into international geographies?

We already have SteerX entity in the US. Many of our investors also come from the US industry. As I have worked in the US healthcare industry for the last 23 years from multiple States, I have a huge network there. That is one of the markets we want to prioritise opening for our startups. We are working on building a model where we can take them to multiple international markets including US. Europe, Middle East, UAE, Africa, South East Asia and Australia are in our initial list where we want to structurally open the access for startups.

What are the differences in healthcare innovation ecosystem in the US and India?

In the US there are large players, very well-funded and capitalised using the governments as well as private money. There is significant amount of capital available for innovation by startups as well. Hence, the scope for innovation and how innovation is backed in the US is far ahead from where India is today. On the other side, in India the insurance penetration in the private segment is still very low. About 20 – 30 per cent of the country has 80 per cent of the healthcare infrastructure, while 70 per cent of the country doesn’t have basic infrastructure for offering high quality healthcare to people. The startups with newer innovation are finding early support in the form of grants from the governments, from certain CSR funding, or programmes like BIRAC. Beyond that there are VCs who expect the startups to have reached a certain stage before they invest. In the middle there is a gap as there are no specialised players offering strategic capital when the startups get grant and they become investable by VCs. That is the area where India struggles the most and that is the gap we are looking to plug.

How diverse is innovation in the healthcare sector in India?

We have been connected with most of the top IITs, IIMs, ISB, BITS, IKP, KIIT, and with the specialised healthcare accelerators as well. We have seen good on the ground innovation that is happening at most of the incubators across the country including in the areas of deeptech. However, most of them lack finding enough backing, in terms of capital, access to where the care happens today, access to potential buyers and adopters like hospitals or diagnostic chain or clinics, who are going to buy these products and services from the startups. The acceptance level to innovate, explore and back these early stage startups and ideas, and use their products in clinical practices…that mindset and framework is not well defined today leading to lot of these innovations going waste.

Have you seen startups that have the potential to enter the global market?

If you ask me is every startup ready for getting USFDA approval, then the short answer is not, but are they enough to make name and disruption, then the answer is absolutely! India, has almost 15,000 – 20,000 startups in healthcare and its allied sectors put together, out of that do we have 500 – 1,000 startups that meet the criteria to go global…yes absolutely. These startups need the right guidance and capital to go out there and find adoption in the international markets.

Which are the areas that have the potential to disrupt the healthcare industry in India?

The medtech in particular has a disruption potential in the country because historically we have been so less penetrated as we still have import dependency by 80 per cent. Hence, it presents a huge opportunity. There is next generation diagnostic and treatment approaches that include digital therapeutics, precision medicine, virtual reality-based therapies. Then there is biotechnology where we talk about gene editing, cellular biology, stem cells, 3D printing, newer drug and newer therapies with faster cycle time to go through clinical trials offering precision medicine. Lastly, there are not significant solutions for fraud detection and prevention, not many value-based care models, access to working capital and short-term loan, are newer models that are going to emerge.

Any suggestions for the government to further boost the sector?

My ask from the government will be to continuously improve the policy framework in a way that it creates opportunities for startups to thrive. Do lot more buying from startups, open the doors as they do for trade with multiple countries, keeping startups at the centre, so that they can go experiment across geographies. Ease and expedite regulations. For example, USFDA may take two – three years which could be detrimental to startups and their success as everyday there is burn in the capital so the ability to make the decision at the regulatory level faster will significantly benefit the startup ecosystem as a whole.