asia healthtech investment landscape 2017 full year report

HEALTHTECHINVESTMENTLANDSCAPE

ASIA

FULL YEAR 2017

INVESTMENT TRENDS

• Key Findings•Asia Pacific • China Focus• Rest of Asia Focus

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We are pleased to share the 2017 Full Year Asia HealthTech Investment Landscape report, a full update of our most popular report in 2017.

As we predicted last July, 2017 was a record-breaking year for HealthTech in Asia Pacific with funding exceeding the US$2.6B mark! Asia also saw a landmark of 230 deals executed in 2017, thus doubling 2016’s total.

We observed investors in the ecosystem become more confident, and willing to make larger investments in HealthTech companies. The overall distribution of 2017 funding in Series B and C deals accounted for 55% of total funding versus 15% in 2016.

Although we believe it is still a little soon for exits in view of the average maturity lifecycle in HealthTech versus other verticals, we fully expect to see a growing number of Asia HealthTech IPO transactions in 2018.

Galen Growth Asia is significantly expanding the information on each HealthTech venture it tracks and we will be announcing further information on this and our new insights in the coming weeks.

We would love to hear your opinion of this report, your ideas to improve it or simply to share with us relevant Asia HealthTech deal or transaction information.

JULIEN DE SALABERRY

Co-founder,Managing director

2©2018 by Galen Growth Asia - All rights reserved.

In partnership with corporations, government organisations, startups and key stakeholder groups, Galen Growth Asia is building an integrated innovation ecosystem focused on HealthTech startups to innovate, disrupt and solve our healthcare systems pain points.

Galen Growth Asia believes that HealthTech will play a central role in addressing Asia’s Health System Inefficiencies in an effective and efficient manner and thus significantly improving the standard of healthcare in the region.

Through our focus on enabling both social value and investing opportunities, we mobilise thought leaders in healthcare and technology, support innovators in HealthTech to inform their solutions and business models, and provide valuable insights for business development and investment opportunities.

ASIA'S HEALTHTECH CONNECTOR

ABOUT GALEN GROWTH ASIA

Galen growth asia

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Galen Growth Asia has built the only comprehensive Asia HealthTech database in which it tracks important information and data points about the growing Asia startup HealthTech ecosystem, vital to monitor its pulse.

The database contains a significant and growing proportion of the region’s HealthTech ventures and, for each one, numerous highly relevant data points including funding and other key business performance information.

Subscribe via our website to receive further information.

©2018 by Galen Growth Asia - All rights reserved.

ABOUT OUR HEALTHTECH DATABASE

$2.6BILLION

3000+STARTUPS

Galen growth asia

In 2017, Asia HealthTech, exceeds 2016, raising more than

$2.6 BILLIONACROSS

230 DEALS


KEY FINDINGS

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MORE DEALS THAN EVER!2017 Asia HealthTech funding, overtook 2016, breaking all records and, as predicted by Galen Growth Asia last July, exceeded US$2.6B. Almost doubling 2016’s total number of deals, 2017 saw 230 deals executed. The region’s top 10 deals represent 40% of total deal value in 2017.

DISTRIBUTION OF DEALSEarly stage and Series A deals, accounting for 27% of all funding deployed in 2017, continue to represent the significant majority of deals by volume.

SERIES B & C STRENGTHEN WHILST SERIES A LOSES MOMENTUMSeries A, B and C deals recorded a 1.5x, 3x and 6x increase in volume respectively. Despite this, Series A halved in total value raised whereas Series B and C achieved 3x and 5x increases respectively YoY.

CHINA REMAINS IN THE LEAD China’s total HealthTech deal share by value represents 76% of total funding deployed in 2017 in HealthTech. The top 7 deals in China represent 35% of the total investment in HealthTech in Asia.

TOP 3 HEALTHTECH CATEGORIES ABOVE ALLMedical Data & Analytics, Health Services Search and Telehealth/ Remote Monitoring have consistently attracted the most funding in 2017 and 2016.

FIVE HEALTHTECH POLES EMERGEChina, India, Singapore, Australia and Indonesia combined are home to over 80% of all HealthTech startups in Asia.

Galen growth asia

©2018 by Galen Growth Asia - All rights reserved. 6

Our analysis of HealthTechinvestments tracks activities across 23 distinct markets in Asia Pacific.

We are continuously monitoring countries that are not listed here.

THE ASIA PACIFIC MAP

FRONTIER MARKET1) Bangladesh2) Bhutan3) Cambodia4) Laos5) Myanmar6) Nepal7) Pakistan

DEVELOPING MARKET1) China2) India3) Indonesia4) Malaysia5) Philippines6) Sri Lanka7) Thailand8) Vietnam

MATURE MARKET1) Australia2) South Korea3) Hong Kong4) Japan5) New Zealand6) Singapore7) Brunei8) Taiwan

Galen growth asia

INVESTMENTTRENDS

ASIA PACIFIC

• 75% of known HealthTech startups in Asia are concentrated across 4 markets:

• 33 % in India• 22 % in China• 11 % in Singapore• 9% in Australia

• Despite its size, Singapore is host to 11% of Asia HealthTech startups driven by its ongoing investments in technology innovation and its very favourable economic and legal climate

• Excluding the 4 markets referred to above, the remainder of Asia is host to just 25% of the Asia HealthTech ecosystem despite being a mix of mature, developing, and frontier markets

ASIA HEALTHTECH KEY MARKETS


Countries with less than 2% market share: Bangladesh, Malaysia, Philippines, Taiwan, and Vietnam.

India33%

China22%

Singapore11 %

Indonesia 6%

Australia 9 %

South Korea2.5%

Japan 5 %

Thailand 3%

Hong Kong 3%

Galen growth asia

• China and India continue to maintain their leadership in deal-making with 78% of all deals by volume, and 90% of all funding by value between the two

• Singapore, Australia, and Japan saw an increase in the volume of deals executed throughout the year from 11% in H1 to 15% in H2. However deal value share reduced from 13% in H1 to 6.5% in H2

• Of note, Hong Kong’s share of deal value which spiked, this year, as a result of the $40M Prenetics successful fund raise in October 2017 matched Japan where 10 deals were closed

2017 ASIA HEALTHTECH INVESTMENTSSHARE BY COUNTRY


Other deals: Malaysia (2), South Korea (2), Cambodia (2), Taiwan (2), Bangladesh (2), Philippines (1), Vietnam (1).

Total Volume Share (%)

9

106$1.9B

China

To

tal A

mo

unt

Inve

sted

($

M)

The number in the bubbles describes the number of closed deals. China’s total deal value also included to accommodate the sca

100

50

400

25

5% 10% 20% 30% 40% 50%

200

0

India

73

Indonesia3

Hong Kong2 Japan10

Australia8Singapore 15

Galen growth asia

• 2017 is a record-breaking year where total funding deployed exceeded $2.6B

• The total number of deals closed in 2017almost doubled while funding grew by approximately 16% compared to 2016

• The higher deal count demonstrates the continued fast growing vibrancy of the region’s ecosystem

• The most notable and sizable deal in 2017 was the $200M Series D by Hao Daifu

ASIA HEALTHTECH FUNDING HISTORY2017 VS 2016


$1,

284

$2,

015

$2,

239

$75

1

$1,

271

$19

91

$2,

60

2

Q1 Q2 Q3 Q4

56

31

85

116

71

230

196

153

2016 Investments ($M)

2017 Investments ($M)

2016 Deals2017 Deals

$24

1

Galen growth asia

• In 2017, we saw a growing investor appetite for Series B & C deals reflecting the ecosystem’s pipeline of startups maturing

• Although we welcome the growth in Early stage volume, we note that the average deal size in 2017 is shrinking: will we see Series B average funding size reducing in 2018 or additional Series A stages e.g. A1, A2, etc.?

• There was no disclosed Series E funding round in 2017

• It also should be noted that 2017 saw a significant growth of deal volume for each stage with Series A, B and C achieving a minimum of doubling in volume

ASIA HEALTHTECH FUNDING VALUE BY STAGE 2017 VS 2016


0

250

500

750

1,000

Angel Seed Pre-A Series A Series B Series C Series D Series E

Tot

al F

und

ing

per

Sta

ge

($M

)

2016 2017

Galen growth asia

• Number of deals per quarter reached its peak in Q2 2017 but decelerated in H2 to end at a similar level to Q4 2016

• Overall, 2017 witnessed a more consistent total funding deployed every quarter which contributed to executing more deals in comparison to 2016

• Q2 2016 is an outlier by total value as a result of the super-normal $500M Series A investment by Ping An in Good Doctor –the latter reported to be filling for an IPO in 2018 (Source: Reuters)

QOQ ASIA HEALTHTECH FUNDING HISTORY2017 VS 2016


$24

1

$1,

04

3

$73

1

$22

5

$75

1

$5

20

$72

0

$6

41

31

2529 31

71

82

43

34

Investment in $M Deals

Galen growth asia

• Q4 2017 witnessed a significant growth in the number of Series A, B and C deals signed

• Q1- Q3 2017 maintained a stable flow of Early and Pre-A funding rounds

• Overall, Series B deal volume expanded consistently over the last 6 quarters.Similarly, Series C volume grew steadily over the last 3 quarters

QOQ ASIA HEALTHTECH DEAL VOLUME SHARE BY STAGE2017 VS 2016


Deals data exclude unspecific funding stage

13

41% 46% 45% 47% 49% 48% 49%

28%

45% 33% 31%

40%28% 30% 22%

28%

14%

13%

7%

10%

13%17%

28%

4%

7%

7%5%

10% 16%4%

3%

3% 3%7%

Q1' 16 Q2' 16 Q3' 16 Q4' 16 Q1' 17 Q2' 17 Q3' 17 Q4' 17

Early & Pre-A Series A Series B Series C Series D Series E

17%

2%

Galen growth asia

• 2016 apparent deal size exuberance sobered in 2017

• After 6 quarters of steady Early and Growth stage median deal size, H2 2017 witnessed a 3x increase in Early stage deals value compared to H1 2017 and 2x compared to H2 2016

• The increase in volume and deal value of Series B and C deals has had an uptick effect on the median growth stage deal size

• The largest deals in 2017 by value were the $200M investment in Dao Daifu from H1, closely followed by Wuxi NextCode’s $165M Series B extension investment in H2

ASIA HEALTHTECH DEAL SIZE RANGES AND MEDIAN2017 VS 2016


$0.5M

$1M

$0.6M

$2.2M

$10M

$12M

$11M

$19M

$500M

$437M

$200M

$165M

Median early-stage deals

Median Growth-stage deals

Largest Deal

H1

2016

H2

2016

H1

2017

H2

2017

Galen growth asia

ASIA HEALTHTECH MOST FUNDED CATEGORIES BY VALUE

15©2018 by Galen Growth Asia - All rights reserved. Galen growth asia

• 3 categories have consistently dominated in the past two years

• In 2017, the top 5 represented 58% of all deal volume

• Mobile Fitness & Health apps is the new kid on the block

• Other than in H2 2016, Online Marketplace continues to maintain its top 5 position

• Will Medical Data & Analytics still be in pole position in 2018?

ASIA HEALTHTECH CATEGORY SHARE BY VOLUME


H1 2016 H2 2016 H1 2017 H2 2017

1

2

3

4

5

Galen growth asia

Based on the funding data we have tracked to date, the general funding timeline and quanta for a HealthTech startup in Asia is shaping up as follows:

THE ASIA HEALTHTECH FUNDING TIMELINE


Incorporation

Min. funding: 0.1MMax. funding: 2.9MAve. funding: 1.2M

Seed

Min. funding: 0.2MMax. funding: 9.0MAve. funding: 1.9M

Min. funding: 1MMax. funding: 5MAve. size: 2.6M

Min. funding: 1.5MMax. funding: 40MAve. funding: 10M

Angel Series APre-A Series B Series DSeries C

0-1 years

1-2 years

2years

4years

4-5 years

5years

>9years

Min. funding: 6MMax. funding: 165MAve. funding: 24.1M

Min. funding: 8.6MMax. funding: 105MAve. size: 32.3M

Funding size: >100M

17 Galen growth asia

INVESTMENTTRENDS

CHINA

• Total funding in 2017 remains flat at $1.97B, just shy of 2016’s $2.08B

• After a deceleration in Q4 2016 of funding, Q1 2017 kicked off strongly and set the tone for the full year

• Total deal count in 2017 increased by more than 100% compared to 2016

• Quarterly total funding value throughout 2017 was more consistent than in 2016

• The most sizable deal in 2017 was the $200M Series D by Hao Daifu

• Q2 2016 was an outlier by total value as a result of the super-normal $500M Series A investment by Ping An in Good Doctor – the latter reported to be filling for an IPO in 2018 (Source Reuters)

QOQ CHINA HEALTHTECH FUNDING HISTORY


$20

0

$1,

015

$6

65

$20

0

$6

04

$32

6

$5

86

$4

63

13 12

8

16

37

31

22

16


Galen growth asia

• 2017 saw fewer Series D and E deals than in 2016 counter balanced by a strong growth in the number of Series A B, C deals

• Will we therefore witness more Series D and E deals in 2018?

• It is interesting to note that Early & Pre-A deal volume share in China is weaker than across the remainder of the region

QOQ CHINA HEALTHTECH DEAL VOLUME SHARE BY STAGE2017 VS 2016


Deals data exclude unspecified funding stage

20

25%17% 13%

31% 32%26%

35%

19%

42%50%

25%

44% 38%

39%25%

31%

33%

17%

13%

19%

16% 26%30%

25%

8%

25%

11%10%

5%25%

8%

13%

6% 3% 5%13%

Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017


Galen growth asia

2017 CHINA HEALTHTECH MEGA DEALS


$200.0M

Series DFebruary

Series BSeptember

Series BAugust

Series CNovember

Series CNovember

Series AFebruary

StrategicAugust

Hao Daifu

$165.0M$152.0M

$105.0M $101.0M $100.0M $100.0M

Wuxi Nextcode

固生堂

中医3D

MedCloudMinds

AnnoroadAnkon

Technologies


INVESTMENTTRENDS

REST OF ASIA(Excluding China)

• After a timid 2016, 2017 experienced strong growth both in value and volume

• 2017 saw a ~2x increase in deal volume driving an impressive ~3.6x increase in total deal value

• H2 2017 witnessed a slowing of the H1 2017 deal volume momentum

• 60% of total deal value in rest of Asia can be attributed to deals in India alone, representing a 4x YoY

QOQ REST OF ASIA HEALTHTECH FUNDING HISTORY2017 VS 2016


$4

1

$28

$6

6

$25

$14

7

$19

5

$10

4

$13

9

18

13

21

15

34

51

20

16

$ -‐

$ 2 0

$ 4 0

$ 6 0

$ 8 0

$ 1 0 0

$ 1 2 0

$ 1 4 0

$ 1 6 0

$ 1 8 0

$ 2 0 0

0

1 0

2 0

3 0

4 0

5 0

6 0



• Q4 2017 witnessed a build up of momentum for Series A, B and C

• The last quarter of 2017, India witnessed a strengthening of Series A deal volume equivalent to the sum of Series B and C

• Over the past two years, approximately 60% of volume has been Early and Pre-A deals, which is reflective of the growing maturity of these markets

• Will we therefore see a build up of Series A, B and C deals in these markets in 2018?

QOQ REST OF ASIA HEALTHTECH DEAL VOLUME SHARE BY STAGE2017 VS 2016


Deals data exclude unspecific funding stage

24

53%

75%

57%64% 68% 63% 62%

43%

47%17%

33%

36%18% 24% 19%

14%

8%5%

9% 11%5%

36%

3%2%

14% 7%5% 3%


Galen growth asia

2017 REST OF ASIA HEALTHTECH MAJOR DEALS


Series AApril

Series CAugust

Series CNovember

$40.0M $40.0M$26.0M

Series BAugust

Series BFebruary

$55.0M

$40.0M

Series DJanuary

Series BOctober

Practo

Prenetics

$40.0M

$30.0M$26.0M $25.0M $25.0M

Healthcareat Home

Med Genome Portea CXA CureFit


• Even though India continues to grow in deal volume, the other markets in this group experienced a higher level of activity in 2017

• Singapore continues to attract Asia HealthTech startups driven by its ongoing investments in tech innovation and its very favourable economic and legal climate

• Rest of Asia is entering 2018 with strong momentum which is contributing to the overall deal vibrancy in the ecosystem in the region

REST OF ASIA HEALTHTECH INVESTMENT COUNTRY DISTRIBUTION


India65%

Singapore13%

Japan9%

Australia7%

Indonesia3%

Malaysia2% Vietnam

1%

2017

India71%

Singapore13%

Japan5%

Australia8%

Indonesia3%

2016



METHODOLOGYWHAT WE DEFINE AS HEALTHTECHHealthTech defines the intersection between healthcare and technology and is also sometimes referred to as digital health. HealthTech does not include Biotech, such as protein research or pharmaceuticals, and also does not include MedTech, such as devices that are implanted into the body.

WHAT INFORMATION DO WE TRACKGalen Growth Asia tracks a comprehensive inventory of key data points ranging from company demographics to funding and valuation on an evolving and curated list of HealthTech ventures drawn from all markets in Asia Pacific.

WHERE DO WE SOURCE OUR INFORMATIONGalen Growth Asia collates its data from primary research, public domain sources (press releases and news) and from its unique network. The information is both disclosed and undisclosed by nature.

LEXICONYoY: Year on yearQoQ: Quarter on quarter

Consult www.galengrowth.asia for further information.

IMPORTANT INFORMATION This report is provided for informational purposes and was prepared in good faith on the basis of public information available at the time of publication without independent verification.

Galen Growth Asia does not guarantee or warrant the reliability or completeness of the data nor its usefulness in achieving any particular purposes.

Galen Growth Asia shall not be liable for any loss, damage, cost or expense incurred by reason of any persons use or reliance on this report.

This report is a proprietary aggregation of publicly available and undisclosed data and shall not be forwarded or reproduced without the prior written consent of Galen Growth Asia.


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