By Seema Singh
One way, though not the surest, to gauge the maturity of emerging technologies is to follow the venture money. So when I heard Sudhir Sethi, founder chairman and managing director of IDG Ventures India, say that his next investment, to close very soon, is going to be in a medical device company, I wasn’t surprised. IDG has an eye for med-tech. It earlier spotted a talented set of entrepreneurs in Perfint Healthcare, a Chennai-based company that makes image-guided oncology care devices. But what did surprise me is the fact that Sethi and his colleagues evaluated more than 110 medical device companies before closing on this ‘one’.
Does India even have so many medical device companies? Almost all of $5 billion medical device market in India is served by imported technologies. We don’t even have a regulatory body for medical devices, a k a CEE or FDA. As a result, most entrepreneurs end up seeking the European or the American regulatory approval if they have a new product. That not only adds to their cost, increasing the time-to-market, but has literally acted as a stumbling block for shovel-ready ideas in this space.
We’ll come to know of IDG’s investment soon, but Sethi looks pretty confident about this sector. It’s the “next wave” in technology, he says.
This augurs well. Here’s why.
For the last five years, the Stanford-India Bio design (SIB) program, started by a $4.5 million funding from the Department of Biotechnology, and run in collaboration with Stanford University, All India Institute of Medical Sciences, and IIT-Delhi, has been priming the physician-engineer community in the country to identify medical needs and design medical devices that are inexpensive and have large application. A few spin outs from the programme are already testing the markets, one being ConSure Medical, that makes a product for incontinence care.
At a deeper level its significance lies in the spreading “culture of bio design’. After AIIMS and IIT-D, IIT-Madras has begun teaching a course and a new center of bio design has come up in the Indian Institute of Science, which the institute director hopes will be used well by the industry. The India-US program also hosts an annual med-tech summit in India. “That all of our fellows have been involved in teaching younger fellows and interns will allow them to nurture younger talent in their future industry roles,” says Rajiv Doshi, executive director of SIB at Stanford and an accomplished med-tech inventor who is an MD, Engineer, VC, Mentor, and Entrepreneur— all rolled into one.
Perhaps, the investor community is warming up to the idea as well. In November last year, Xcyton, a molecular diagnostics company in Bangalore, raised Rs 20 crore from Fidelity. For a start-up that struggled for over 15 years, and in the process moved from making public-health products to high-end ICU products and services, the Fidelity deal is a mark of maturity as it’s one of the few foreign investments to have happened in this area. (You can read about the long-arduous journey of Xcyton here, an account that was instrumental in eliciting some investor interest says its founder.)
“If there’s a local credible regulatory body then the credibility of the entire Indian technology goes up,” says Xcyton’s founder and managing director BV Ravi Kumar. As expected, he is seeking one of the US regulatory approvals — Clinical Laboratory Improvement Amendments.
When most med-tech behemoths — think GE, Siemens, Philips, (and even Samsung, which is now entering medical technology) — are innovating for India, from India, a local regulatory body, one that everyone believes in, and a competitive environment can lower the entry barriers for Indian med-tech entrepreneurs.