Unitus Seed Fund has teamed up with Pfizer Inc., PATH, Manipal Hospitals and Narayana Health to unveil StartHealth a nationwide investment programme where Rs.10 crore or $1.6 million will be offered to early-stage start-ups developing affordable technology-driven healthcare products and services for India.

The funding which was introduced in February 2015 will give an impetus to promising breakthrough innovations of Indian health-technology start-ups, that are stuck in underfunded pilot projects .

StartHealth will now support start-ups engaged in affordable healthcare cloud IT solutions to overcome service constraints in low-resource healthcare settings. It will support companies developing appropriate micro-device innovations used in labs or clinical settings to improve quality of care at primary clinics, besides low-cost diagnostic and monitoring devices operational in smartphones enabling timely diagnosis and treatment.

“This is a first-of-a-kind initiative that we know of. There have been separate initiatives, but none that has combined all three. Unitus brings in a catalytic set of funding, mentorship and support services to help promising health tech startups break out of the ‘valley of death’ and get a shot at realizing their potential. We are not aware of any other entities combining non-dilutive funding with conditional seed investments to give innovators a better chance of success without requiring as much focus on the fundraising process, Dave Richards, co founder & managing partner, Unitus Seed Fund told Pharmabiz in an email.

Now PATH, Manipal Hospitals, Narayana Health will provide hands-on-support. The access to facilities for pilot and market studies of the products developed will be provided by Manipal Hospitals and Narayana Health. Pfizer is the strategic funder and the capital is sourced from its Foundation.

“We work together to track promising health-tech entrepreneurs and collaborate on due diligence to identify the support for go-to-market. We then pay the non-dilutive funding and make a venture investment commitment conditioned on them meeting specific milestones over the next 6-12 months. Then, we engage in specific efforts to help the company achieve the milestones, which if accomplished, then the investment commitment is paid”, he added.

“There are dozens of health-tech entrepreneurs who have applied and the evaluation is on. This indicates significant interest and demand!,” said the Unitus Seed Fund chief.

Currently, there is limited early-stage venture capital for healthcare startups. Only few angel investors fund healthcare. Most health-tech startups have not been able to make sufficient progress for paucity of financial resources and are seen to scramble for grants. “Our flexible funding plus expert support in a package provides over two years would help more health-tech entrepreneurs realize their potential”, he said.

“India is identified for this funding because of the dearth of affordable, advanced healthcare technology for its masses. There is a huge market opportunity with good quality of entrepreneurs. Startups are national assets and need serious enabling. Without such initiatives, we will not be able to make progress to fulfill healthcare needs of 1.25 billion people”, observed Richards.

Unitus plans to consider other emerging markets. It is gathering positive feedback of StartHealth to prove its credibility. The company is also analyzing global healthcare models that fit into a local context only to replicate it in those countries needing reliable, affordable health care.