Investing in health tech to tackle Indonesia’s greatest challenges

The COVID-19 pandemic has exposed critical gaps in Indonesia’s healthcare infrastructure, revealing structural and systemic shortcomings requiring scalable solutions. Change doesn’t happen overnight, particularly for the healthcare sector, which consists of multiple intertwined industries with strict regulatory oversight. But because the industry is highly regulated, regulations play a huge role in shaping trends. 

Recently, the Omnibus Health Law (Law No. 17 of 2023) introduced sweeping reforms to revitalize the Indonesian healthcare system in the aftermath of the COVID-19 pandemic. The Omnibus Law focuses on improving the quality and accessibility of Indonesia’s healthcare personnel and services and supports the country’s strides toward pharmaceutical self-sufficiency. These reforms indicate that the healthcare sector is set to grow in several key areas:

1. The government, citizens, and healthcare innovations are shifting towards better access to affordable healthcare services.
2. The government mandates that healthcare facilities prioritize domestic pharmaceutical and medical devices.
3. Pharmaceutical and medical device producers in Indonesia are required to prioritize domestic raw materials.

The utilization of technology in the healthcare industry

Indonesian healthcare is entering a renaissance in its utilization of technology. To solve Indonesia’s most pressing healthcare challenges, we need innovations that change how we diagnose and treat diseases and deliver health. We see opportunities where health tech startups can significantly improve healthcare outcomes in three key areas: cost-effectiveness, intuitiveness, and non-communicable diseases (NCDs).

1. Cost-effectiveness

For decades, healthcare delivery costs have risen globally. In 2020, Indonesia’s healthcare expenditure accounted for 3.41% of GDP. This level of spending has meant that citizens often bear a significant portion of their medical expenses. In the same year, 31.78% of Indonesia’s total health expenditures were out-of-pocket (OOP), above the World Health Organization’s recommended maximum of 20%.

While Indonesia’s healthcare system showing progress, there is potential for improvement to reduce financial burdens and enhance health outcomes.

• Automation & efficiency: Digital health tech can automate administrative tasks such as appointment scheduling, billing, and insurance claims processing. This reduces the need for extensive administrative staff and lowers operational costs.
• Health monitoring devices: Wearable health monitoring devices and apps help in the early detection of potential health issues, allowing for timely intervention, which can reduce long-term costs.
• Data analytics: Big data analytics in healthcare can identify patterns and predict disease outbreaks, enabling healthcare systems to allocate resources more effectively and avoid costly emergency responses.

Mesh Bio, another portfolio company, uses data analytics to enhance clinical decision-making and provide predictive analytics for diabetes care. With their HealthVector® Diabetes, type II diabetes patients can now stratify their risk of developing Chronic Kidney Disease in the next three years, allowing patients to make required lifestyle changes, thereby reducing risk factors and avoiding costly future treatments. 

2. Intuitiveness

One of the large-scale responses to the COVID-19 pandemic is that the line between consumer and patient is blurring, and consumers want more transparency and personalization from their doctors. Going forward, the healthcare sector will need more innovations to keep pace with the demand for transparency and intuitive healthcare delivery.

Digital health technologies, such as patient portals and mobile health apps, can offer user-friendly interfaces that enhance patient engagement and self-management. These tools allow for easy appointment scheduling, viewing test results, accessing health information, receiving medication reminders, and communicating with healthcare providers from home. Additionally, advances in genomics enable personalized care plans based on individual patient history, risk, and need, further improving patient satisfaction and health outcomes.

3. Taking care of non-communicable diseases 

NCDs, which include cardiovascular diseases, chronic respiratory diseases, diabetes, and cancer, are the leading cause of death in Indonesia, accounting for the biggest portion of total BPJS (Healthcare and Social Security Agency) spending. In 2023, NCDs incurred costs of up to Rp34.7 trillion, with a total of 29.7 million cases. 

According to the World Health Organization, the best way to address NCDs is through prevention, early detection, and effective treatment. With healthcare innovations, patients are more likely to receive the correct diagnosis and treatment plan earlier, increasing their recovery rate from these diseases. 

East Ventures’ health tech portfolio companies such as Nusantics, NalaGenetics, PathGen, and Mesh Bio are making significant strides in tackling the NCDs. These startups have introduced numerous innovations in health technology, enabling the public to conduct early detection of NCDs. Particularly for cancer, these silent killers require early detection for effective and timely treatment.

Making early cancer detection accessible to all 

In Indonesia, cancer is one of the most prevalent critical illnesses, alongside stroke, heart disease, and diabetes. According to data from the Global Cancer Observatory, in 2022, there were more than 408,661 new cancer cases in Indonesia, with a total of 242,099 deaths, and these numbers are projected to increase by 63% between 2025 and 2040. 

Some of the most common types of cancer among patients include breast cancer, cervical cancer, lung cancer, and colorectal cancer.

As a commitment to reducing NCDs in Indonesia and Southeast Asia, East Ventures’ health tech portfolio companies have developed health screening and early detection methods for various types of cancer.

NalaGenetics has introduced MammoReady, a breast cancer risk prediction test that combines comprehensive DNA analysis to estimate breast cancer risk based on three main aspects:

• Polygenic Risk: Uses a scoring system to predict the likelihood of developing breast cancer within the next five years.
• Monogenic Risk: Assesses specific genetic factors by examining genes such as BRCA1 and BRCA2, which are known to be associated with breast cancer.
• Clinical Risk: Evaluates individuals based on a combination of genetic and clinical risk factors to categorize them as high-risk or average-risk.

The test is simple and quick, consisting of three steps: non-invasive swab sample collection at home, genetic testing, and results delivery. The reports are available within 4-6 weeks and classify individuals into two risk categories: Average (below-average risk) and Elevated (above-average risk).

NalaGenetics, founded by Levana Sani and Astrid Irwanto, is a Singapore-based biotech company dedicated to reducing adverse drug reactions and improving prescription efficacy through genetic testing tailored for local populations in Singapore and Indonesia. By studying how specific DNA traits affect drug responses, the company aims to develop affordable, easy-to-understand, and localized genetic tests for Asian physicians and patients.

For cervical cancer, Nusantics developed the PathoScan hrHPV qPCR Kit, an HPV DNA test with an accuracy rate of up to 99.65% for cervical swabs. This test detects 14 high-risk HPV virus types, including HPV-16 and HPV-18, which are the primary causes of cervical cancer. 

The virus infection induces a precancerous change known as cervical intraepithelial neoplasia (CIN). CIN can be detected by various screening tests and treated with simple techniques. Detection and treatment of the disease at the CIN stage prevent the development of cervical cancer in the future.

Nusantics’ test kit is especially unique as it offers 98.48% accuracy for urine samples, allowing for painless sample collection.

Founded in 2020 by Revata Utama, Nusantics is an Indonesian biotechnology company that offers precision molecular diagnostics. It specializes in PCR and next-generation sequencing-based solutions to close the diagnostics gap and improve healthcare outcomes.

Meanwhile, PathGen, founded by Dr. Susanti and dr. Michael Spica Rampangilei, is developing affordable molecular diagnostics test kits for various types of cancer, including colorectal, lung, and nasopharyngeal cancer. Looking forward, PathGen plans to leverage next-generation sequencing (NGS) technology to facilitate more comprehensive genetic profiling of diseases.

Founded in 2020, this biotechnology company utilizes PCR technology in its molecular diagnostics solutions to enhance diagnostic accuracy and accessibility for every patient.

East Ventures’ commitment to the health tech industry

East Ventures has been actively investing in healthcare startups and companies in Southeast Asia. Today, we have a portfolio presence throughout the end-to-end healthcare vertical. East Ventures has been at the forefront of genomics-related ventures since 2018 when it was a relatively novel area.

Beyond genomics, our health tech portfolio includes companies such as Aevice Health, Intellect, Riliv, Diri Care, FitHub, Klar, Amili, and Etana. These companies are pioneering advancements in mental health, personalized care, fitness, diagnostics, biotechnology, and other areas of focus. What began as an emerging thesis for East Ventures in 2013 has evolved into a core pillar and area of expertise, from funding to large-scale initiatives.

We have had a persistent belief in this region for more than a decade, and we are eager to show our significant efforts in delivering a believable Southeast Asia through the betterment of the region’s healthcare. 

If you are a startup founder building in the health tech sector, send your pitch here.

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By Maria Marcia, Investment Professional at East Ventures.