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Supporting HealthQuad to Scale Impact in India and Beyond

Investing in HealthQuad opens new doors for J&J Impact Ventures to play a larger role in supporting health innovation in India because of the vast need and great potential.
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Kola Lakshmi, an Accredited Social Health Activist (ASHA) in Penjerla, India, uses her phone to efficiently communicate viainstant messaging platforms and access digital health tools 

Last month, HealthQuad announced closing its second fund with $162 million from investors including Johnson & Johnson Impact Ventures (J&J Impact Ventures) and other strategic corporate investors, private investment groups and development financial institutions such as British International Investment and Swedfund. HealthQuad is the largest healthcare venture capital fund in India and partners with local entrepreneurs to scale transformative and impactful healthcare businesses. Like J&J Impact Ventures, HealthQuad’s overall purpose is to invest in healthcare companies with market-based solutions that have the potential to produce both financial returns and deep social impact.

The opportunity for impact in India is strong. With almost half of the country’s 1.3 billion population living near or below the poverty line for lower-middle-income countries ($3.20 per day), many people can’t afford basic healthcare. Additionally, high out-of-pocket healthcare expenses push millions of middle-income Indians into poverty each year, perpetuating negative health outcomes. Based on the guidelines by the World Health Organization, there is also a shortage of health workers in India. And with approximately two-thirds of the population living in rural areas, access to primary care and services is often limited. These challenges are then exacerbated by the lack of quality care available, as less than 1% of the country’s hospitals and clinical facilities are accredited by the national health board.

These issues with healthcare and health workforce capacity in India motivated HealthQuad to start its first pilot impact venture fund in 2016. The fund invested in seven healthcare start-ups working across a broad range of industry segments and business models, including medical devices, life sciences, digital and health tech, allied services, and delivery of care. Supported by Quadria Capital (one of the largest healthcare private equity funds in Asia) and KOIS (a global pioneer in impact investing), HealthQuad’s initial portfolio of companies demonstrated the ability to achieve both financial success—including two successful exits to-date—and social impact for underserved patient populations. One of the companies within HealthQuad’s portfolio, Medikabazaar, has grown into India’s largest e-commerce and digital platform for medical equipment and supplies to reduce the cost of care.

Based on the experience and insights from their first impact fund, the HealthQuad team is now focused primarily on investing in disruptive health tech business models for its second fund. Through technology, these models are meant to fundamentally shift how and what health care services are provided, rather than seeking to just optimize existing structures. HealthQuad believes this approach provides the greatest opportunity for rapid scaling and broad reach across India. Digital health companies can also tap into India’s strong technical talent pool of engineers, software programmers and data scientists.

Fueled by healthcare needs, market dynamics and a growing economy in India, there is incredible potential for HealthQuad’s tech-enabled companies to scale at a magnitude as great, or greater, than anywhere else in the world. HealthQuad’s second fund will target 10-15 companies in its portfolio. It has already invested in seven companies, including:

By investing in HealthQuad, J&J Impact Ventures can support these and other disruptive companies. The investment is also opening new doors for us. We want to play a larger role in supporting health innovation in India because of the vast need and great potential. In partnering with HealthQuad, we can learn from its team about how we can be most impactful. We see a natural symbiotic relationship taking shape: for HealthQuad, the ability to tap into the expertise of the world’s largest and most broadly based healthcare company, and for J&J Impact Ventures, new insights into reaching India’s low-income populations, unique local market dynamics and new health tech business models. The longer-term goal is that the companies in each of our portfolios will benefit, as they look to engage through peer networking and grow across borders into new countries and regions.

At J&J Impact Ventures, we are excited for the future of HealthQuad and look forward to supporting India’s impact entrepreneurs working to improve healthcare.