A note to Founders

At Rainmatter, one of our focuses is to build an ecosystem of companies that are helping Indians stay healthy and fit. In this pursuit, we’ve invested in approx 35+ companies (only 27 announced) and continue to meet more startups and founders every week.

A common question that is asked is our investment framework when evaluating companies. What do we prefer and how do we make decisions? While our investment playbook continues to evolve, there are few patterns we have seen in good companies that stand out. Sharing some of our observations here hoping they will be useful to founders building for health in India.

1. Trust is the only moat in preventive health. In healthcare, people don’t buy products. They buy trust. Preventive health is not an impulse purchase. Unlike sick care, preventive health requires behavior change, which Indians resist unless they deeply trust the source.

   So, before you raise money, ask yourself:

   • Do people trust you enough to pay upfront, or do you need constant marketing?
   • Is there real evidence that your intervention works—or is it just another diet plan, gadget, or wellness promise?

   If you don’t have a strong, organic trust loop, raising VC money won’t help. Money can buy ads, but it can’t buy credibility.

2. Distribution is your Intellectual Property. In preventive health, distribution is the product. Without it, you’re just another marketing agency. India is filled with “next-gen” fitness apps, ayurveda solutions, and longevity programs—most fail because they don’t solve the hardest problem: distribution.

   You should ensure this before you raise money:

   • You have a low-CAC, high-retention acquisition channel—word of mouth, organic virality, or a B2B partner who does the heavy lifting.
   • You don’t rely on Google/Facebook ads to acquire users.

   Most preventive health startups mistake marketing for products.

3. Your real product is the outcome. Preventive health isn’t about engagement, it’s about results. Indians don’t pay for health advice—they pay for outcomes. If your model is content-based or habit-driven but lacks measurable outcomes, you will struggle to justify raising any money. Before you raise money, prove:
   • Measurable outcomes: What % of users improved their health?
   • Behavior stickiness: How many users are still with you after 6 months? Is this a short-term motivation spike or a lasting habit?
   • Revenue beyond one-time purchases: Subscription, long-term engagement, or ecosystem lock-in.

   The worst mistake you can make is optimizing for likes, shares, and time spent instead of real-world health results.

4. You should only raise money when you’ve proven at least one of these:
   Distribution: You’ve hacked a scalable way to acquire patients/customers without burning money on ads.
   Clinical Efficacy: Your product has regulatory approval, proven clinical outcomes, or strong signals of delivering outcomes.
   Network Effects: Your product becomes more valuable as more people use it.

5. In India, you’re not fighting incumbents. You’re fighting inertia. Unlike in the U.S., where insurers or employers drive adoption, in India:
   • Hospitals are conservative and slow-moving. Selling to them takes years.
   • Doctors are overworked. Adoption needs to be frictionless.
   • Consumers pay out of pocket. If you need to educate them, your CAC will kill you.

I hope these notes are useful. Good luck to all building in Health in India.