Merck Backs Healthcare Marketplace HD in Southeast Asia

AI Integration Accelerates in Healthcare

Major technology firms and pharmaceutical corporations are rapidly increasing their adoption of artificial intelligence within the healthcare sector. A recent collaboration between AWS and General Catalyst was announced last month, designed to expedite the creation and rollout of AI-powered healthcare solutions.

Furthermore, GE HealthCare has partnered with AWS to develop generative AI applications specifically for medical purposes in 2024.

HDmall: Digitizing Healthcare in Southeast Asia

Based in Thailand, the healthcare startup HD has developed HDmall, a digital marketplace aimed at streamlining the traditionally fragmented medical industry across Southeast Asia. The platform enables users to locate healthcare providers, including hospitals and clinics.

It also facilitates the discovery of specific surgical procedures and health screening packages, consolidates services to achieve cost reductions, and offers users flexible installment payment plans.

Securing Funding for Growth and AI Development

The company has successfully raised $7.8 million in equity funding. These funds will be used to enhance the marketplace and further invest in its AI technology.

This funding round is particularly noteworthy as it represents the first investment by U.S. pharmaceutical leader Merck Sharp & Dohme (MSD) in an Asia Pacific health tech startup. MSD operates under the Merck brand outside of the U.S. and Canada and launched the IDEA Studios accelerator program last June.

Additional investors in HD’s funding included SBI Ven Capital, M Venture Partners, FEBE Ventures, and Partech Partners.

Strategic Partnership with MSD

According to HD’s co-founder and CEO, Sheji Ho, MSD initiated contact due to the platform’s significant sales volume of HPV vaccines administered through its network of hospitals and clinics. Ho stated in an exclusive interview with TechCrunch that HD currently offers the largest selection of vaccines online within its operating markets.

Marketplace Performance and Expansion Goals

Established five years ago, HDmall’s marketplace currently features over 30,000 stock-keeping units (SKUs) sourced from more than 2,500 hospitals, clinics, and a select group of pharmaceutical partners.

The platform serves 400,000 paying customers across Thailand and Indonesia, generating an annual gross transaction volume of $100 million. HD aims to expand its reach to 5,000 healthcare providers and 600,000 patients by 2025.

This latest funding brings HD’s total funding to $18 million, following a $5.6 million round raised less than a year prior.

Introducing Jib AI: An AI-Powered Chatbot

Early in 2024, HD began developing Jib AI, an AI chatbot trained on anonymized data related to healthcare products, transaction history, and chat commerce interactions. This training utilizes advanced large language models.

Following the integration of generative AI into the marketplace, approximately 60% of customer interactions are now handled by AI agents, providing “high-quality, instant 24/7 response to customers”, as noted by Ho.

Enhancing Patient Care with AI

Jib AI is designed to assist healthcare professionals – including nurses, doctors, and surgeons – by managing initial triage and care navigation tasks, allowing them to concentrate on delivering high-quality patient care.

Future AI Capabilities and Partnerships

Over the next 12 months, the company intends to enhance Jib AI’s capabilities to include order and refund processing, assisted checkouts, appointment scheduling, electronic health record verification, and medical information retrieval. This will be achieved through the Jib AI Health Assistant and AI-powered asynchronous virtual care provided by expert physicians.

HD also plans to broaden its network of external partners over the next two years, with a focus on insurance companies, pharmaceutical firms, employers, and educational institutions.

A Unique B2C2B Strategy

“While US healthcare companies like Transcarent and Accolade initially focused on B2B care navigation, we recognize a distinct opportunity in Southeast Asia to implement a ‘B2C2B strategy’ as outlined by Andreessen Horowitz,” Ho explained to TechCrunch.

“This approach leverages our established B2C success to transition into B2B, enabling us to pursue enterprise monetization from the outset.”

Healthcare in Southeast Asia

A significant number of venture-funded healthcare companies in Southeast Asia, including Doctor Anywhere in Singapore, and Halodoc and Alodokter in Indonesia, have concentrated their efforts on telehealth and virtual care solutions. However, Ho suggests this strategy isn't viable long-term within the region. He notes that, following the pandemic, telehealth’s business model in Southeast Asia is facing considerable obstacles and is experiencing declining support from both consumers and investors.

The company is now strategically positioning itself as a hybrid model, drawing inspiration from Amazon One Medical in the United States, Chinese outpatient platforms like JD Health and Alibaba Health, and the Indian inpatient platform, Pristyn Care.

The landscape of healthcare differs considerably in developing Southeast Asian nations like Thailand, Indonesia, and Vietnam. Unlike Western countries with established family doctor systems, patients frequently proceed directly to hospitals or clinics. This often creates difficulties for patients in locating appropriate care, determining the best facility, and managing associated expenses, as Ho explained to TechCrunch.

With approximately 40% of healthcare costs borne directly by individuals and limited private health insurance penetration, price sensitivity is high, and patients experience increased financial pressure when making healthcare decisions. Consequently, there’s a growing need for platforms that deliver clarity, transparency, and simplified comparison of healthcare providers, Ho elaborated.

HD’s platform functions more akin to an “Amazon for healthcare.” Rather than listing individual general practitioners or facilitating appointment booking, it allows healthcare providers to market standardized services. “We offer a range of services, including health checkups, cancer screenings, IVF procedures, root canal treatments, HPV vaccinations, and surgical options like thyroid and hemorrhoid procedures. This approach reflects how most individuals in the region initiate their healthcare journey – by searching for specific services, not particular doctors,” Ho stated.

Currently, HD operates in Thailand and Indonesia, with planned expansions into Vietnam and Myanmar, driven by the similarities in their healthcare infrastructure.

“Their healthcare systems share notable parallels with Mainland China. A substantial portion, around 40%, is paid for out-of-pocket. The absence of a family doctor system leads patients directly to hospitals or clinics, followed by potential government social security coverage,” Ho shared with TechCrunch. “However, these government budgets are shrinking, increasing the financial burden on the private sector, whether through direct payments or private insurance. This trend signifies a significant opportunity for us in the insurance sector moving forward.”

Furthermore, a growing trend of self-directed healthcare is emerging in these markets. Individuals are becoming increasingly comfortable utilizing tools like Google Search or ChatGPT to research health-related information. This aligns favorably with HD’s offerings, as it empowers individuals to take control of their healthcare choices, according to Ho.