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Strides in healthcare sector in Bangladesh have simultaneously been one of Bangladesh’s key drivers and indicators of economic and social development since its inception. Average life expectancy has grown from 52 years in the 1970s to 72 years today, the maternal mortality ratio has reduced by 67 percent since 1990, and the infant mortality rate has come down to 1.9 percent in 2019 from 9.4 percent in 1981.
The demand for healthcare services in the country continues to grow, especially in the aftermath of the COVID-19 pandemic, and now stands as a USD 6.6 Bn market. As the pressure on the healthcare sector compiles, the country requires significant rethinking of ways to finance the industry’s growth for the future. While donor funding has been a pillar of the healthcare sector’s transformation in the past, significant gaps remain in the funding landscape in this sector.
One solution to closing this gap is blended finance, which strategically uses public or philanthropic resources to mobilize new private capital for development outcomes. Globally, blended finance has proven to be immensely successful and offers the benefits of increased funds, better sustainability, incentivizing inventions, and the development of local markets.
To gauge the opportunities for attracting capital and facilitating innovation in the healthcare sector in Bangladesh, LightCastle Partners, in partnership with USAID AUHC (Advancing Universal Health Coverage in Bangladesh), held a virtual webinar titled “Taking the Bangladesh Health Sector into the Future” on 13th September 2022. The discussion was split into two panels, with inputs from experts, entrepreneurs, and key players in each panel. The panel topics and respective panelists were as follows:
Moderated by Tazin Shadid, Co-Founder and CEO, AmarLab
Moderated by Bijon Islam, Co-Founder and CEO, LightCastle Partners
The event began with opening remarks from Dr. Fida Mehran, Project Development Specialist (Health Systems Strengthening), USAID, and a keynote presentation by Mehad ul Haque, Project Manager & Sr. Business Consultant, LightCastle Partners.
“As Bangladesh progresses into LMIC status, USAID wants to support the national health system with sustainable solutions – using resources that exist in both the public and private sectors – to improve the health and livelihoods of the people of Bangladesh.” – Dr. Fida Mehran, Project Development Specialist (Health Systems Strengthening), USAID
“We have only eight years to achieve universal health coverage, and blended finance is one of its greatest tools.” – Dr. Khondaker A. Mamun, Founder & Chairman, CMED
With startups sprouting at a faster rate than ever in Bangladesh and globally, the healthcare sector is yet another sector where startups have the opportunity for transformation. Healthcare startups can impact the market in several ways – they can be a marketplace aggregator by supporting the availability of existing services; they can become a direct provider of services to improve the quality and add more value to the market, or they can leverage technology to improve the overall healthcare system. In the past decade, a lot of healthcare startups have already made their names across the country, transforming the sector.
One such startup, CMED, started as a university research project which was then patented and published before starting commercially with the guidance of doctors. The motivation behind CMED was to make universal healthcare accessible and affordable to the mass population. Through their platform, patients can track their health using Artificial Intelligence and the Internet of Things. Bridging technology to cover the gap in healthcare services allowed CMED to now spread to 65 districts across the country, supporting underserved populations through collaboration with UNICEF, and serving as a unique healthcare tracking platform based in Bangladesh.
DhakaCast also pushed boundaries when it started as a podcast in 2019, at a time when podcasts were yet to be consumed in the mainstream in Bangladesh. The startup began to support the 13.1 Mn diabetic patients across Bangladesh, helping raise awareness of the disease, especially in rural areas where awareness is lacking. Through their platform, DhakaCast helps reduce diabetes-related diseases and saves the cost for patients who would otherwise need to visit the doctor more frequently.
“In India, there are 65 startups working with diabetic patients, but in Bangladesh, there is only one startup – DhakaCast. The gap in this market is enormous.” – Ms. Fahreen Hannan, Co-Founder & CEO, DhakaCast
“Not a lot of things work out during the early days for startups. But keeping your focus straight on your customer experience and retention is the key.” – Dr. Ishtiaque Zahid, Co-Founder & COO, AmarLab
When Doctorola, an online doctor appointment platform, began in 2015, the ecosystem of healthcare startups was much smaller. As a startup working as a marketplace aggregator, combining impact and scale was one of the core goals of the company. Today, they serve more than 450K patients through nearly 10K doctors through their platform, but getting here was not easy. When Doctorola started, it was a task in itself to explain to people how the concept of having a third party between hospitals and patients would work, and onboarding hospitals and doctors was a difficult task.
A similar issue was faced by Amarlab, when it started as an at-home-at-work pathology test service. The model was a challenge for both customers and diagnostic centers to understand, and building transparency and trust came forward as a major issue. Yet, by leveraging data-backed results to build that trust, Amarlab is now partnered with 30 diagnostic centers, having served households through more than 50K tests. Throughout this journey, their focus remained on customer experience and retention, making them a dependable at-home service. For both Doctorola and Amarlab, success depended on innovation and building data-backed trust. This continues to be an issue for healthcare startups, particularly those who are bringing new technologies to improve healthcare services. Without sufficient data on the market for those services and facing a market that is often much more resistant to changes, particularly with technology, health-tech startups have a much harder time kicking off with their models.
“I see lots of startups coming in and many of them are doing fantastic. The progression [in the ecosystem] is clearly there. However, in the segments of being direct providers or introducing new technologies to make the healthcare services better still have a lot of scope for improvement.” – Mr. Abdul Matin Emon, Founder, Chief Product Officer, Praava Health
Another aspect that is crucial for healthcare enterprises is sustainability. One example of building a sustainable model is Surjer Hashi Network (SHN), a 25-year-old network that has over 399 clinics catering to underserved communities in over 64 districts. While the goal was to provide quality services at affordable prices and create a positive customer experience, as Bangladesh graduates from its LDC status, SHN is having to rethink its targets. From rural patients, the spotlight is now shifting to lower middle-income urban patients. Building infrastructure and maintaining transparency and efficiency is at the heart of their effort to create sustainable impact.
“Surjer Hashi has become a trusted name among communities all across Bangladesh during a time when the government was still building its capacity. So this is something that the population really required.” – Ms. Shaila Purvin, CEO, Surjer Hashi Network (SHN)
In the startup ecosystem, healthcare is currently the fourth largest sector attracting investments, attracting more than USD 20 Mn in the past decade. Yet, there is still a major financing gap in the healthcare sector that needs to be fulfilled.
Startup Bangladesh Limited is a Venture Capital that operates under the ICT Ministry of the Government of Bangladesh, helping startups with not only capital but also network, guidance, and collaboration. With key healthcare startups such as DhakaCast and Moner Bondhu in their portfolio, Startup Bangladesh Limited focuses on innovation that is backed by technology.
Healthcare is a sector impacting all of Bangladesh. If a startup is operating in the healthcare sector, its impacts are well beyond that sector – it also helps develop skills, generate employment, and reduce inequalities. For a startup to be successful with raising investments, it must have a model that has opportunities in both urban and rural areas, serving a niche with better and cheaper services, even if that is not technically a healthcare service. Even building a platform that connects stakeholders such as hospitals and labs in an interoperable way can be a path to success. Combining innovation, quality, and scalability is a must, and models that are replicable can also help startups grab opportunities outside of the country. From the perspective of startups, new and innovative methods of financing, such as blended finance, can be key in solving the financial gap. Understanding the core of the problem, having a solid ground for the product, and having a robust team are all factors that can help startups be more investible to investors.
“A startup in the healthcare sector does not have to only provide healthcare services, it could contribute to any part of the whole value chain. They can target niche services such as administrative services and make it better and cheaper and they should be able to succeed.” – Hasan A. Arif, Head of Investments Portfolio, Startup Bangladesh Limited
Watch the recording of the webinar here.
Access the keynote presentation here.
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