India and Indonesia: New opportunities for AI-driven digital healthcare ventures
Iris Li | Pablo Ventura Almirall
Since the 2020s, artificial intelligence has increasingly contributed to economic growth and helped maintain technological dominance from a macro perspective. At the same time, the adoption of artificial intelligence across various industries has also improved the quality of life for global residents and increased operational efficiency in both private and public sectors. For example, in the digital healthcare industry, artificial intelligence can be applied across every department of medical care services, including virtual diagnostic services and preventive care, electronic prescriptions, and hospital data management.
As the adoption of artificial intelligence becomes a primary trend in the healthcare industry, AI-driven companies are also more likely to secure funding from investors, as evidenced by AI-powered ventures occupying over 60 percent of global funding in digital healthcare in Q2 2025. However, from an investment perspective, investors are more cautious and selective in funding ventures in the digital health industry in general compared to the peak in 2021, when the application of AI-driven technology during the COVID pandemic led to a wave of investments in AI-driven digital health ventures. Despite the global decline, digital health in the Asia-Pacific (APAC) region still attracted $1.2B in funding, up 4% from last year, with 63% of the investment flowing into AI-powered ventures, signaling strong confidence in the market’s resilience and innovation.
Currently, Australia, Hong Kong, and Japan, all from East Asia and Pacific (EAP), have secured over 60 percent of the funding for digital health in APAC, indicating investors’ preference for developed markets with strong government regulatory support and AI innovation. Compared to this, South and Southeast Asian countries receive less attention from investors, potentially due to the consideration of risks of lacking qualified healthcare providers and infrastructure. While the EAP region offers a mature medical environment that is well-suited to artificial intelligence, making it a safer bet for investors, South and Southeast Asia, on the other hand, offers greater potential for returns in the long run. The following paragraphs will examine India and Indonesia, the two most populous countries in the region, for investors evaluating the risks and benefits of investing in AI-powered digital health startups in South and Southeast Asia. Both countries have significant potential for digital health investment, given their shared demographic demands and significant underestimation by investors.
While both countries face similar challenges in integrating artificial intelligence into their healthcare systems, given their nature as lower-middle-income countries, high population and population density compared to most other countries, the recent government-led effort to improve the data repository provides a strong foundation for further AI adoption in digital healthcare. Traditionally, investors tend to avoid funding ventures of the AI-driven healthcare industry in highly populated developing countries, as large patient volumes and diverse populations across the country make it challenging to manage and standardize the extensive data required for almost all forms of AI integration. To be more specific, it’s more difficult to ensure nationwide coverage of cloud infrastructure, especially in areas with underdeveloped internet and power infrastructure. Even if it is technically feasible, it requires a higher initial cost than in countries with smaller populations and geographic regions.
However, both countries’ governments have already established or are working on creating a mature digital healthcare platform that is accessible, integrated, and interoperable for both patients and providers, which reduces costs for ventures and lowers the investment risk for potential investors. For example, the Indonesian government cooperates with non-profit organizations such as the Indonesian Public Health Experts Association and initiated the Transform Health Indonesia projects, aiming to improve the centralization and interoperability of electronic patient data and bridge the urban and rural gap in access to stable internet connections. These actions give AI-driven ventures easy access to well-managed, standardized datasets, simplifying data cleaning and increasing the likelihood of progressing to the next steps like machine learning, AI prediction models, and automatic medical image labeling. For India, the Ayushman Bharat Digital Mission (ABDM) standardizes patient records by following consistent interoperability standards. Also, the mobile app nature of ABDM offers greater flexibility and improves accessibility for patients, making the datasets more comprehensive and accurate. Furthermore, ABDM has already considered ways to simplify access to datasets for startups. By providing APIs for potential investments and integrating private sources into the government-run digital health system, datasets will become increasingly accessible and extensive over time.
Besides the strong government support in improving digital patient and provider records and making digital healthcare datasets more accessible for AI startups, the large underserved demographic demands shared by both countries also make the markets more appealing and more likely to generate higher returns for AI healthcare ventures. For example, both India and Indonesia are experiencing an above-global-average level of risk of dying between ages 30 and 70 due to cardiovascular diseases, cancer, diabetes, or chronic respiratory diseases, with a probability rate of 23.6% and 21.9%, respectively, signaling the high level of need for advanced technologies to provide more precise and efficient preventive, diagnostic, and surgical processes. However, funding for AI-driven digital healthcare primarily flows to health management solutions, which are nearing the stage of saturation as governments can support them more effectively than the private sector. At the same time, the investment opportunities in digital health supplemental solutions for chronic diseases are underestimated, indicating a relatively higher market share for startups in this niche and greater potential for startups to survive in the market.
Iris Li is a student at Columbia University (CC ’28) studying Applied Mathematics and Financial Economics. She is interested in investment banking and private equity, especially the technology and healthcare divisions. In her free time, she likes practicing golf at the Chelsea Piers, seeing operas, and trying new restaurants in NYC.
 | A guest post by
|