When COVID-19 hit, India’s healthcare system had to take a big leap overnight. For a country that has long struggled with accessibility, affordability, and uneven infrastructure, telehealth came in as more than a temporary fix. It became a scalable alternative. In the years since, digital healthcare has grown multi fold with increased credibility, users, and capital.
But as the sector enters a new phase, with fundraising slowing and consolidation beginning, it will be interesting to see which models will endure and scale. In this article we have a look at how India’s telehealth sector is evolving from consultations to comprehensive care and what that means for investors and founders building for the next decade.
A large and underpenetrated market, now formalized
India has always had the ingredients for a thriving telehealth market, a vast population, urban-rural healthcare disparity, and a strong digital ecosystem. Yet until recently, telemedicine remained a fragmented, underutilized market.
This changed dramatically over the last five years. The first breakthrough came in 2020, when the Telemedicine Practice Guidelines were released amid the pandemic. For the first time, doctors and startups had legal clarity on virtual consultations which gave them the confidence and clarity to improvise and correctly structure the delivery model. Around the same time, COVID forced both public and private healthcare systems to go digital, exposing patients to remote care at scale.
The second wave of enablement came from the government’s digital health infrastructure push. The Ayushman Bharat Digital Mission (ABDM) introduced Ayushman Bharat Health Account (ABHA IDs 650M+ issued) which has e-prescriptions, health lockers, and provider giving India a stackable digital health infra that few emerging markets can match.
India’s tech readiness to adopt such model was already in place with over 750 million internet users, UPI-led familiarity with digital platforms, and smartphone penetration even in rural areas, patient-side adoption became viable. On the demand side, the rise of chronic conditions created a market that needs a scalable delivery system to efficiently solve these problems.
Put together, the Indian telehealth market is now projected to reach USD 3.6–3.9 billion by 2025, and nearly USD 10 billion by 2030, growing at a 24% CAGR. But more importantly, it is now being built on digitally, regulatorily, and behaviourally backed factors.
Changing consumer behaviour: Increased awareness but less stickiness
Pandemic led to millions of Indians; many first-time users experience virtual care often for non-critical or chronic issues which made them comfortable with the concept. But while awareness and openness to teleconsultation are now high, sustained usage and stickiness remain uneven.
Surveys indicate that 87% of urban Indians are open to using telehealth, yet only 28 -30% have done so more than once. The reasons include lack of continuity in care, fragmented digital experiences, and a general tendency to go back to the family doctor once the crisis subsides.
On the physician side, teleconsultation has gone from a very new conept to routine. A significant share of urban doctors now maintains a virtual consultation window especially for follow-ups or chronic disease management. Platforms like Practo and DocOn have even created digital OPD calendars for clinics.
“Before COVID, it was more challenging. It took us a lot more time to convince providers to see the benefits of digital. But after COVID, I must say that it’s a reverse effect. We have a lot more pull from the supply side.” Quoted by Shahsank, Practo CEO
But the real test lies in Tier 2 and beyond. Platforms like CureBay and the government’s eSanjeevani have demonstrated that when digital meets localized presence such as health ATMs or assisted clinics, telehealth works even in low-bandwidth, low-literacy settings. What’s emerging is not a pure-play digital future, but a hybrid one where online consults are supported by offline trust. This blend is where India’s telehealth future will likely stabilize.
Decoding the business models: Consultation, care, and cross-sell
India’s telehealth ecosystem isn’t homogenous. Instead, three broad business models have emerged each of which has its own economics, retention challenges, and growth potential.
1. The first model is the pure-play consult platforms, like Practo and Mfine. These players have tech-first models with pay-per-use or subscription offerings. While their gross margins can reach 70%, the biggest challenge is high CAC and limited upsell potential unless paired with diagnostics or follow-up care.
2. The second model is the hybrid chronic care platform, exemplified by players like CureBay or Tata Health. These companies design care journeys for chronic conditions combining virtual consults with physical presence (micro-clinics and at-home services). This model may have a higher operational set-up but in enjoys better retention, higher LTV/CAC ratios, and greater control over care quality.
3. Lastly, we have full-stack providers like PharmEasy and Tata 1mg, who combine pharmacy, diagnostics, and teleconsultation into a single app ecosystem. While these players often carry the lowest margins on an individual service basis, their ability to cross-sell and lock in consumer health spend helps in driving ARPU at scale. However, the overall profitability is driven by multiple other operational factors
Crucial parameters across business model
Margin profiles and the economics of scale
It is difficult to define a standard margin profile for the business, as it varies based on the model and aspects of healthcare delivery delivered. For investors, the real question is: who can scale profitably?
Practo reported INR 240 Cr in FY24 revenue with 22% YoY growth, achieving profitability for the first time in early 2024. Its international expansion, particularly in the Middle East is showing promise with higher ARPU and lower CAC. The company’s success indicates that telehealth platforms with controlled CAC and international ambitions can deliver margins and scale.
On the other end of the spectrum is PharmEasy, whose model has all the arrays of healthcare delivery. After acquiring Medlife and a majority stake in Thyrocare, it grew to INR 6,800 crore in FY23 revenue, but the debt burden and operational costs weighed heavily on its profitability. The PharmEasy story is a reminder that while horizontal expansion helps improving ARPU and retention, it also demands operational precision.
CureBay, a newer entrant targeting semi-urban and rural India via a hybrid model of clinics + tech, raised USD 21 million in 2025 from Bertelsmann. While financials aren’t public, our research suggests that they’re achieving better CAC efficiency than metro-focused peers.
Fundraising & M&A: From soaring valuations to corrections
Between 2020 and 2022, Indian telehealth was a funding hotspot. PharmEasy acquired Medlife (USD 250M) and took a 66% stake in Thyrocare (USD 550M). Dozens of early-stage ventures closed seed and Series A round backed by pandemic urgency and global investor interest. However, by mid-2025, telemedicine deal volumes dropped nearly 90% YoY. Funding is no longer being driven by broad category enthusiasm it now is being directed at sustainable and scalable models with revenue visibility and differentiated value propositions.
Global trends have been similar to India depciting major slowdown
In the M&A landscape, consolidation is beginning. Large players are looking to acquire niche chronic-care platforms or regional service providers to deepen their stacks. Investors, too, are signaling a move toward fewer, deeper bets.
Valuation multiples in telehealth have cooled significantly since the 2020–21 highs. During the funding peak, revenue multiples of 6–8x were common for teleconsult platforms. By 2024–25, this had recalibrated to 3.5–5x, especially for businesses with modest scale or unclear paths to profitability. For EBITDA-positive companies like Practo which plans to go public, it will be interesting to see how market it valuing the scale and profitability.
The highest premiums are now reserved for players who can demonstrate true differentiation or successful integration with insurance or ABDM-linked platforms.
Recent Deals & Transactions in Indian Telehealth
1. CureBay $21M Series A (May 2025): CureBay, a hybrid healthcare platform targeting semi-urban and rural markets, secured $ 21 Mn from Bertelsmann India Investments in May 2025. These round signals investor confidence in tech-driven clinic models that blend offline access with teleconsult features. CureBay’s approach is seen as a potential template for affordable healthcare delivery in underserved regions.
2. Truemeds Series C Planned (~USD 44M): Truemeds, primarily an online pharmacy with growing telehealth capabilities, raised a $ 22M Series B in April 2022 led by Westbridge Capital, and is reported to be preparing a $44M Series C in early 2025, with Accel India mentioned among potential investors. While not purely telehealth, its move into medicine access and potential teleconsult integrations makes this relevant for ecosystem expansion.
What Investors should watch closely?
Despite funding slowdown, investor interest in telehealth should remain real but also more nuanced. The opportunity lies in:
1. Platforms that drive habit, not just access
Teleconsultation is easy to offer but hard to monetize unless it’s embedded in a longer care journey. Investors should seek models that foster repeated, high-trust usage like chronic care plans. Habitual usage leads to better LTV and lower CAC.
2. Models that combine tech scale with physical trust
India is not a pure-play digital market especially in healthcare. Models that smartly blend online interfaces with offline presence (via clinics, kiosks, or home care) are proving more capital-efficient, particularly in Tier 2 and beyond. Think hybrid care, not app-only.
3. Infrastructure plays embedded into the system
With India’s ABDM rollout gaining traction, there’s opportunity in platforms that plug into digital health records, claims, or pre-auths for insurers and hospitals. These infra-layer businesses may not be consumer-facing but can become indispensable pipes powering the ecosystem.
6 aspects of chronic care
At the same time, some fo the critical risks remain:
1. Urban B2C models still struggle with CAC-LTV gaps
Without an ecosystem or physical backend, urban teleconsult startups face steep CAC and poor monetization. Investors should be wary of models that see usage but no stickiness or promise scale without margin visibility.
2. Exit optionality is still limited
The path to IPO is narrow, and there are only a handful of scaled strategic buyers. Until more consolidation plays out, telehealth lacks the deep exit pools seen in diagnostics or hospitals. Investors should underwrite with longer holding periods or partial liquidity plans.
The road ahead: Chronic care, embedded Infra and consolidation
The next wave in Indian telehealth won’t just be about accessibility, it will be about completeness of care. Platforms that can manage chronic disease across the full stack consultation, coaching, diagnostics, and claims will define the winners.
We also expect deeper convergence with insurance and ABDM-linked claim systems. Whoever builds the infrastructure to plug into India’s national digital rails will own the transaction layer. Consolidation will continue not in a strong roll-up format but through targeted acquisitions and partnerships that add geographic reach or vertical depth and not necessarily horizontal services as seen before.
Telehealth in India is no longer a tech experiment. With stronger digital infrastructure, maturing consumer behaviour, and models beginning to show profitability, the sector is entering its second innings. But it’s not just the size of the market that matters, it’s how defensible your model is. Investors are shifting from backing usage to backing retention, margins, and embedded value.
LoEstro Advisors is an investment banking firm specializing in sell-side fundraising and M&A advisory, along with a strong consulting arm. Recognized as the #1 financial advisor in education in India, we are the advisor of choice to India’s blue-chip education businesses.
Over the last four years, we have grown to be one of India’s largest (in terms of M&A transactions) homegrown boutique investment banks, with $1.25 bn+ worth of combined deals closed across education, healthcare, consumer, and technology sectors.
