Thailand-based healthtech startup HD has raised $7.8 million in equity funding to enhance its AI-powered marketplace, HDmall, which digitizes the fragmented medical industry in Southeast Asia. The funding marks the first investment of U.S. pharma giant Merck Sharp & Dohme (MSD) in a healthtech startup in Asia Pacific.

HD's platform helps users find healthcare providers like hospitals and clinics, assists in finding specific surgeries and health check-ups, aggregates services to lower costs, and provides users with installment payment options. The startup has already seen significant traction, with over 30,000 stock-keeping units (SKUs) from more than 2,500 hospitals and clinics, and 400,000 paying customers across Thailand and Indonesia, generating $100 million in annual gross transaction volume.

The latest financing, which brings HD's total funding to $18 million, comes less than a year after it raised a $5.6 million round. Other participants in the funding included SBI Ven Capital, M Venture Partners, FEBE Venture, and Partech Partners. The investment will be used to further develop HD's AI technology, including its AI chatbot, Jib AI, which has been trained on anonymized healthcare product data, transaction data, and chat commerce data sets using advanced large language models.

Jib AI has already shown significant promise, with almost 60% of customer interactions being managed by AI agents, delivering "high-quality, instant 24/7 response to customers." The AI chatbot helps healthcare professionals focus on providing quality patient care by handling most initial triaging and care navigation tasks. Over the next 12 months, the company aims to improve its AI agent capabilities by adding order and refund processing, assisted checkouts, scheduling, electronic health record checking, and medical information retrieval with the Jib AI Health Assistant.

HD's approach to healthcare in Southeast Asia is unique, focusing on a "B2C2B strategy" that leverages its existing B2C success to transition into B2B, effectively pursuing enterprise monetization from the outset. This approach is distinct from US healthcare companies like Transcarent and Accolade, which started directly with B2B care navigation. HD's platform operates more like the "Amazon of healthcare," enabling healthcare providers to sell productized services, rather than listing individual GPs or offering physician appointment scheduling.

The healthcare industry in Southeast Asia is quite different from Western countries, with patients often going straight to hospitals or clinics without a family doctor system. This makes it difficult for patients to find the right healthcare services, know where to go, and understand how to handle the costs. HD's platform addresses this issue by providing clarity, transparency, and ease of comparison among various providers. The company plans to expand its network of external partners over the next two years, focusing on insurance and pharmaceutical companies, as well as employers and educational institutions.

HD's expansion plans include entering Vietnam and eyeing Myanmar due to their similar healthcare systems. The company sees a significant opportunity in the growing demand for platforms that offer clarity, transparency, and ease of comparison among various providers, particularly in markets where 40% of healthcare costs are paid by individuals and private health insurance coverage is low. Moreover, there is a rising trend towards self-empowerment in terms of user behavior in these markets, with individuals getting more accustomed to using tools like Google Search or ChatGPT to search for healthcare-related subjects.

HD's success in securing funding from a pharma giant like Merck Sharp & Dohme marks a significant milestone in the adoption of AI in the healthcare industry. As Big Tech and pharmaceutical companies continue to accelerate the implementation of artificial intelligence in healthcare, startups like HD are poised to play a critical role in shaping the future of healthcare in Southeast Asia and beyond.