Are medical tourism portals a sound investment?

 

Effective web based medical tourism booking and information agencies are very expensive to develop and promote. Berlin based medical tourism site Medigo raised €5m from the California-based equity firm Accel Partners to expand in the US and UK in 2014. It has extensive plans to expand across the Gulf and in CIS countries, with local offices in Dubai and Abu Dhabi. To do this it needs to raise between €15 million and €20 million from investors in the US, the Gulf and CIS countries

The UAE is the fifth-largest source market for Medigo.com for those travelling overseas for treatment after the US, Australia, the UK and France. In the first nine months in the UAE it handled 265 outbound patients and 800 inbound ones.

Health care tech start-ups are a mushrooming in India. Credihealth provides comparisons between doctors, hospitals and treatment packages. Launch funding of $1.5 million is just the start as it is looking to raise another $20 million. New medical tourism portal Godoctr values itself at $1 million. Asian medical booking site Practo has already raised $30 million.

The question is when, or even if, investors will get a return in what is a very competitive market with scores of national, global and regional web and app based information/booking services out there.

Most funding comes from venture capital and private equity funds that freely admit that there will be more losers than winners in their portfolio, but they take a punt in the hope of quick profits when a large tech group buys a portal.

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