INDONESIA – Preliminary data on investments in health tech startups in Southeast Asia suggests a slowing momentum this year even as major players continue to pull more funds.

One of the largest telemedicine providers in the region, Alodokter, has announced its latest funding round backed by MDI Ventures, the investment arm of Indonesia’s Telkom Group, and Samsung Venture Investment Corporation.

Last month, its fiercest rival in Indonesia, Halodoc, announced an $80 million round led by local conglomerate Astra International and joined by Singapore’s Temasek Holdings. Halodoc has raised at least $145 million in funding to date.

Only nine health tech companies in the region have announced funding so far this year to raise $86.3 million in total proceeds. This compares to a total of 43 companies throughout 2020 as the region adjusted to the impact of COVID-19, our data shows.

Health tech emerged as the third most popular business vertical last year in terms of deal count and sixth in terms of deal value, which stood at $283 million.

The global e-health market was valued at $74,476.4 million in 2019, and is projected to reach $2,30,640.4 million by 2027, according to Allied Market Researchers.

E-health(health tech) market includes major suppliers such as Cerner Corporation, GE Healthcare, and Allscripts. These suppliers have their manufacturing facilities spread across various countries across North America, Asia-Pacific, Europe and South America.

However, the COVID pandemic has affected these operations both negatively and positively and the slump up reported in Southern Asia can be attributed to this. For instance, In April 2020, GE Healthcare extended its longtime collaboration with Microsoft to launch a cloud-based COVID-19 patient monitoring software for health systems, which will further boost the e-health market growth.

Therefore, health tech stands a chance even with the pandemic ravaging the world. In Singapore, where six of the nine deals originated in the region so far this year, a total of 31 health tech startups in the city-state had secured $250 million in total funding last year, led by digital therapeutics provider Biofurmis that raised $100 million in September.

Investments in telemedicine startups have driven talent recruitment in Indonesia, according to LinkedIn Premium Insights data analyzed by Edtech startup RevoU.

Based on data for the year ended April 30, 2021, health tech startups in Indinesia saw a 26% increase in the number of employees, the highest among six categories specified in the annual Google, Temasek & Bain’s e-conomy SEA report.

A further look at the data reveals that the growth of telemedicine recruitment is slowing down as companies grow more mature.

During the period, the number of Alodokter employees grew by 20.9% compared to 63.8% in the previous period (April 2019-2020). Meanwhile, Halodoc’s workforce grew by 26.8% compared to 53.2% a year ago.