Kotak sharpens healthcare focus in VC fund expansion
- Over the past three years, it has made equity investments of about $10 million in 16 startups
- KIAL is eyeing opportunities in the life sciences and healthcare sectors at the early stage
BENGALURU : Healthcare is the emerging flavour for Kotak Group’s alternative investment arm as it aims to grow its venture capital business after testing the waters with early-stage investments in 16 startups.
Kotak Investment Advisors Ltd (KIAL) is banking on increasing technology usage and cost advantage to homegrown startups in the healthcare sector, akin to what the Unified Payments Interface (UPI) has done for the payments and financial services sector.
“We are betting on companies which are changing the game for India first like UPI, which is now the preferred payment gateway for our neighbouring countries," Srini Sriniwasan, managing director at KIAL, said in an interview. “UPI was done at population scale. Similarly, the accuracy of diagnosis and drug discoveries becomes better with more data points, and as AI/ML kicks in, it can become world-class."
KIAL, largely a growth capital provider active in the infrastructure, real estate and manufacturing sectors, is eyeing opportunities in the life sciences and healthcare sectors at the early stage. Over the past three years, it has made total equity investments of about $10 million (about ₹80 crore) in 16 startups. These startups have, in turn, attracted $140 million in cumulative capital in follow-on rounds.
KIAL, which manages over $8.5 billion across asset classes such as real estate, private equity, infrastructure, and special situations fund, made its healthcare investments through a proprietary fund. Besides its big venture play, KIAL has also registered an angel fund with a targeted corpus of ₹150 crore but is treading slow on its overall venture investment journey.
While KIAL has been focusing on early-stage VC bets in the healthcare sector, the firm last month paused its Kotak India Alternate Allocation Fund, a fund-of-funds launched last year to invest primarily in private equity and VC funds.
Healthcare startups in KIAL’s portfolio operate in categories such as biotech, targeted therapies, medical devices, consumer wellness, healthcare delivery and healthtech. The portfolio includes Healthians, an on-demand pathology test provider with an asset-light model; Mynvax, a vaccine technology startup founded by two doctors and incubated by the Indian Institute of Science, Bengaluru; and Eyestem, which is developing a stem cell-based therapy to treat age-related muscular degeneration.
In the healthcare delivery space, KIAL has backed Mumbai-based Epigeneres, which offers early-stage cancer detection using a blood test at almost one-fifth the market cost. “They will be global game changers as routine blood tests for cancer will be available for all," Sriniwasan said.
Another investment is in a Pune-based biotech firm Ahammune, which has developed a novel small molecule to treat autoimmune disorder Vitiligo.
KIAL’s healthtech investments include Neuro Equlibrium, a remote diagnosis and treatment platform for inner ear disorders; BeatO, an app started by two diabetic engineers to help with diabetes management digitally; and Medfin, which provides daycare surgeries through a full-stack virtual hospital model.
“All of these have been done after scanning around 350-400 companies across more than three years by our five-member team that includes doctors and PhD holders in the sector," said Dhiraj Rajendran, executive director at KIAL.
