InnAccel to raise $10-12 mn to fund medtech start-ups
Bengaluru-based start-up incubator InnAccel is in talks with wealthy individuals and strategic partners to raise $10-12 million in the next few months, the company’s founder and chief executive officer said. InnAccel plans to use the funds to open branches in other Indian cities and support every year at least 12 start-ups that are into medical devices, prosthetics and diagnostics.
The move comes at a time when India faces a dearth of affordable devices for a whole range of critical health conditions ranging from brain injuries to kidney diseases. “When it comes to simple mechanical solutions and Class I and II devices, there is some good work. But complicated ones as implants which are class III, are rarely attempted,” said Balram Bhargava, executive director, Stanford-India Biodesign Program, a collaboration of the Indian Institute of Technology Delhi, All India Institute of Medical Sciences and Stanford University to spur medical technology innovation via fellowships.
Coeo Labs, one of the start-ups incubated by InnAccel, has designed a device to tackle ventilator-associated pneumonia, a major cause of death in roughly 40% of patients on breathing support in India. The external device regulates secretions in the mouth of the patient electronically to make sure fluids don’t enter the lungs. “We spent over two months at St. Johns Hospital in Bengaluru and noted down around 150 issues that needed urgent attention. We then filtered the top 10 and decided to work on them. We have filed for patent now and will launch it before 2016 end,” said Nitesh Kumar Jangir, founder, Coeo, which plans to launch it at a price point “not as expensive as Rs.1 lakh and as affordable as Rs.5,000”.
“We work closely with hospitals and care centres to deeply understand medical needs, and then start research on products. Our programmes help entrepreneurs incubating as well in residence to begin work from figuring out an idea till launching it,” said Dhanani, who expects InnAccel to launch a Chennai arm in association with a medical college or hospital and expand its Bengaluru facility next year.
“Our aim is to incubate at least 12 start-ups every year, each one for three years. After Chennai, we would look at places such as Mumbai, Pune and Ahmedabad. So, in the next three years, we would have a national network of accelerators to develop innovative medical products for emerging markets, that, in some cases, could also meet developed market needs,” he said.
To fund operations and investments, the firm would raise funds in two tranches in the next five years. “We have started talks with strategic investors who see value in the first med tech portfolio targeting global emerging markets. Part of the money needed will also come from ultra high networth individuals and family offices in India who are truly aligned with the idea of transforming healthcare, and generating outsize returns, if we succeed,” Dhanani said.
InnAccel wants to foster the development of at least 50 novel medical devices and diagnostics by 2020, and launch 25 critical medtech products in India by 2025. According to Unitus Seed Fund, the medical device market in India was $6.3 billion in 2013 and is expected to reach $42 billion by 2025. Most of the devices are in diagnostics and imaging at 37%, followed by medical consu-mables at 16% and orthopedic and prosthetic devices at 10% and the rest is patient aids and dental products.
Sattva Medtech, another incubatee of InnAccel, has designed a device to assess fetal distress—a cause of 3 lakh deaths in the period immediately before and after birth annually in India. It hopes to launch the device which monitors fetal heart rate before the end of 2016. “The difficult part in getting these products to patients is to convince the doctors. You have to make several rounds till when the doctors understand,” said Vibhav Joshi, founder of Sattva Medtech.
Others agreed. “Even as the government is supportive, entrepreneurs face hurdles in animal testing, cadaver testing and product distribution, said Bhargava. “A form of trust has to be built such that doctors and end users can take benefit of it easily.”