Kotak sharpens healthcare focus in VC fund expansion

Kotak Investment Advisors Limited (KIAL) is banking on increasing the use of technology and cost advantages for indigenous startups in the healthcare sector, similar to what Unified Payments Interface (UPI) has done for the payments and financial services sector.

“We are betting on companies that are changing the game for India first, such as UPI, which is now the preferred payment gateway for our neighboring countries,” Srini Srinivasan, managing director of KIAL, said in an interview. The UPI was done on a population scale. Similarly, the accuracy of diagnosis and drug discovery gets better with more data points, and as AI/ML takes off, it can become world-class.”

KIAL, a large-scale active growth capital provider in the infrastructure, real estate and manufacturing sectors, is eyeing opportunities in the life sciences and healthcare sectors at an early stage. Over the last three years, it has made total equity investments of around $10 million 80 crores) in 16 startups. In turn, these startups have attracted $140 million in cumulative capital in follow-on rounds.

KIAL, which manages over $7.5 billion across asset classes such as real estate, private equity, infrastructure and special situation funds, channeled its healthcare investments through a proprietary fund. In addition to its large venture play, KIAL has also registered an angel fund with Target Fund 150 crores but is going 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 shelved its Kotak India Alternate Allocation Fund, launched last year to primarily invest in private equity and VC funds I went.

The 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 initiated by the Indian Institute of Science, Bengaluru; and EyeStem, which is developing a stem cell-based therapy to treat age-related muscle degeneration.

In the healthcare delivery space, KIAL has backed Mumbai-based Epigeners, which offers early-stage cancer detection using blood tests at about a fifth of the market cost. “They will be a global game changer because routine blood tests for cancer will be available to everyone,” Srinivasan said.

Another investment is in Pune-based biotech firm Ahmmune, which has developed a new small molecule to treat the autoimmune disorder vitiligo.

KIAL’s healthtech investments include Neuro Equilibrium, a remote diagnosis and treatment platform for inner ear disorders; BeatO, an app started by two diabetes engineers to help manage diabetes digitally; and Medfin, which provides daycare surgery through a full-stack virtual hospital model.

“All this has been done after scanning around 350-400 companies over a period of more than three years by our five-member team, which includes doctors and PhD holders,” said Dheeraj Rajendran, executive director of KIAL.