House of Diagnostics kicks off $30-40 million funding round amid gathering tailwinds
The diagnostic services sector is expected to benefit from increased demand in the wellness and preventive testing segments, demographic changes, and a host of other factors.
Medical diagnostic chain House of Diagnostics (HOD) has begun the process of raising $30-40 million in a largely primary funding round, two people familiar with the matter said, as the medical diagnostic and healthcare services space heats up.
“The company has been working closely with EY India to do the round," one of the people said. If the round goes through as planned, it will likely be the company’s first external funding. It is expected to use the funds for expansion, the second person said, adding that the deal was launched a few weeks ago.
Both people spoke on the condition of anonymity. HOD and EY India did not respond to Mint’s requests for comment.
Broadly, India’s diagnostics market is set to expand at a compound annual growth rate (CAGR) of 12% to $15-16 billion over the next five years, according to a CareEdge Ratings report from last month. While diagnostic services account for less than 10% of India’s healthcare market, they play a critical role in early disease detection, guiding treatment decisions, and monitoring recovery.
Tailwinds galore
The sector is expected to benefit from increased demand in the wellness/preventive testing segment and other factors such as a shifting demographic profile, expanding healthcare infrastructure in tier-II towns and beyond, and rising rates of private and public health insurance.
Shantanu Jindel, partner at CMS IndusLaw, said a favorable policy environment, foreign direct investments (FDI), rising chronic diseases, an aging population, and increasing awareness around health issues have driven higher test volumes and repeat treatments in metros and tier-II towns.
While penetration outside metros remains low, he said, companies are building hub‑and‑spoke lab networks, partnering with state governments, and conducting mobile and point-of-care (POC) testing in small towns and rural areas.
“Access to quality diagnostic facilities in tier-III downs and rural areas is still a challenge. This is not only an opportunity for consolidation but also for expansion into new territories," Jindel said, adding that high-growth segments include RT‑PCR, oncology panels, infectious disease panels, and other molecular tests.
He said AI image analysis (in pathology and radiology), workflow automation, cloud-based lab information systems, and integrated telemedicine-plus-diagnostics platforms would differentiate larger chains and enable outcome-based offerings.
“Innovative technologies and increased competition are likely to keep prices competitive, and with rising incomes there will be a continued focus on preventive healthcare. All of this should drive demand and keep investors interested in quality assets," Jindel said.
Crowded market
Founded in 2008 by Shubham Sogani, Labham Sogani and Shanti Kumar Sogani, HOD began with the mission of delivering high-quality, affordable medical diagnostic services. The Delhi firm also has presence in Haryana and Uttar Pradesh and has plans to expand both domestically and globally.
In FY24, it reported a total revenue of ₹150 crore, up from ₹120 crore the previous year, according to filings with the ministry of corporate affairs, sourced by Tofler. It posted a net profit of ₹4.3 crore in FY24 after a loss of ₹3.5 crore in FY23.
It competes with several firms including Tenet Diagnostics and Aarthi Scans, as well as larger ones such as Dr. Lal PathLabs, Metropolis Healthcare, SRL Diagnostics, Thyrocare, Apollo Diagnostics and Vijaya Diagnostic Centre. Some of the smaller companies are in various stages of raising funds, according to media reports.
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