Raman spectroscopy of pigmented samples can be problematic owing to strong laser-induced auto-fluorescence. Moving the laser excitation more into the near-infrared region (>900 nm) and detection to the short-wave infrared region (SWIR) (1200–1600 nm) significantly decreases laser-induced-fluorescence for many pigmented samples. However, conventional near-infrared diode-lasers suitable for Raman spectroscopy are expensive. Vertical-external-cavity surface-emitting lasers (VECSELs) are an interesting alternative laser source for Raman spectroscopy. VECSELs offer a narrow linewidth, high power stability, good power efficiency and circular beam profile characteristics, and their wavelength can be engineered over a broad range in the near-infrared. In addition, they offer the potential of low-cost mass production, and they are small in size. We developed a 986-nm VECSEL for a specific biomedical application (Raman measurements of pigmented skin lesions). We implemented and tested the feasibility of the novel 986-nm VECSEL in a SWIR multi-channel Raman spectroscopy instrument. We have characterized the VECSEL in relation to the requirements set by this biomedical application and have demonstrated for the first time Raman spectra of pigmented skin lesion with a VECSEL in the SWIR region. Our results show that the VECSEL fulfils the requirements of a laser source to be applied in Raman spectroscopy. This opens the possibility of using VECSELs for low-cost compact hand-held Raman spectroscopy applications.