Updated on 31 October 2012
Could you kindly share some of the key points that IIF looks in a firm before investing in them?
Our mandate is to invest in early stage companies that have a strong innovation component and have intellectual property. In the life sciences sector, this translates most often into pre-revenue companies that are at advanced stages of product or technology development. Given this stage of the company, a key criteria we consider is the uniqueness of the technology and its proposition as a solution to a problem.
We invest on companies that have technologies which could be game-changers. This automatically translates into a determination of the market size and scalability of the company. Given the stage of the company, another key parameter is the quality of the team. In my opinion, our portfolio companies have teams that are world class. While their technical expertise is proven, the jury still tries to determine their ability to execute a commercially successful venture starting with a unique technology solution. This is where our ability to evaluate the team is important.
What are the recent developments made by the IIF?
IIF became operational exactly two-and-a-half years back. We are now closing in on our 7th investment. Four of these have happened during this calendar year. The early set of companies that we invested in, including Mitra Biotech, are now at a stage where they are raising further capital either through follow-on rounds from us or our co-investors, or through external sources. While we will continue investing, our focus is now shifting towards supporting our existing portfolio companies.
India has seen a number of start-up companies in the life sciences and healthcare sectors in the past five-to-six. What are your comments on this upsurge?
I agree that there has been an upsurge in the life sciences and healthcare sectors, but I think this upsurge is also visible in other sectors such as ICT. Furthermore, it is not just the quantity of start-ups, but encouragingly a qualitative improvement in the start-ups and the maturity of their offerings that are emerging in these sectors. The reasons are common across these sectors. There is an entire generation of individuals who went to the West to study and work and have returned n large numbers to India in the last five years, armed with a global outlook, practices and ideas. Many of these have ventured into entrepreneurship as the opportunities offered by the large firms often don't measure up to their competence.
There is also a new breed of entrepreneurs, who are emerging from large corporates, with a deep domain understanding. These entrepreneurs understand gaps in solution offerings, and are looking to offer niche solutions to the problems or are looking to address the issues. Another category, yet emerging, is a set of academics, who are converting years of research into business applications and building firms around them. This upsurge is encouraging and with the right enablers, can lead to a whole new breed of companies that will emerge from India.
What is the role of IIF in helping start-ups other than providing monitory benefits?
IIF, as a fund has a strategic set of promoters such as NASSCOM and the IKP Trust and investors that include corporates who are leaders in areas of investment, like TCS and Airtel. Furthermore, this is the first fund that the Government of India has invested in through the Department of Science and Technology. We use our investors, promoters and their networks to advise our portfolio companies and provide them market access. We have also led investment rounds, where we have syndicated co-investors, thereby bringing additional capital to these start-ups.