PE, venture capital deals in healthcare, health tech firms grew 16% in 2019

Private equity and venture capital investments in healthcare and healthcare technology companies grew by 16.3 per cent in 2019 to $3.62 billion, from $3.11 billion, a year ago. Almost 58 per cent of the investments were in the healthtech segment. The industry continues to attract investors despite the economic slowdown, and the trend is likely to continue even in 2020, say experts.

Health tech has attracted a major share of these investments, with 55 deals worth $2.12 billion. This was twice the $1.06 billion raised in 81 deals during the same period last year. Forty-nine of the 55 deals, were venture capital, or seed to Series-F investments in companies less than ten years old, with a combined value of $616 million, according to data from Venture Intelligence.

In 2019, as per data collated by Venture Intelligence till December 24, there were 95 deals of which 66 were venture capital investments. In comparison, year 2018 had 120 deals of which 90 were VC.

The surge is despite the economic slowdown, and a number of issues related to the pricing and health insurance in the sector. The impact of these issues to the investors would be only known over time, as the industry is in the middle of an investment cycle.

Vishal Bali, executive chairman, Asia Healthcare Holdings (AHH), a healthcare operating platform founded by TPG Growth, said, "While there are issues related to the economy right now, somehow healthcare gets insulated from a lot of these things. From a healthcare consumption perspective, one is not seeing any slowdown because it is a necessity".

"PE and VC investors will continue to see opportunities in start-ups and new technologies, as this is a 1.3 billion-people consumption story. This could also be a good time to find the right assets," Bali said.

There are some 3,000 healthtech companies in the country and in the quarter ended September, there were about 16 large deals with more than $100 million investments done. There were also exits across 11 deals with $690 million, which shows some kind of activity both in terms of investments and exits, Bali added.

In May 2019, AHH reportedly signed agreements to acquire Nova IVI Fertility for an undisclosed sum.

However, the next financial year is expected to be critical, particularly in the light of rupee devaluation, and how the overall investing scenario and current investments plays out. Some of the major deals, including Seattle-based Columbia Asia's hospitals in India, are expected to take place in 2020.

According to Venture Intelligence, the top PE invsetments in healthcare and healthtech companies included Baring Asia's $880 million investment into Citius Tech in July, 2019, $496 million into AGS Health in May, 2019, Advent International's $250 million investment into Bharat Serums and Vaccines in November, 2019, General Atlantic's $212 million investment into Rubicon Research in Marcy 2019, among others

Buyout fund TIW picks up majority stake in Digital Refresh Networks

Indian buyout firm TIW Private Equity has acquired a majority stake in Mumbai-based Digital Platform Management firm, Digital Refresh Networks Pvt Ltd. "The deal size is about $6 million, giving Digital Refresh bandwidth to strengthen its core services & for acquisitions”.

Founded in 2011 by Ravi Dubey and Barin Mukherjee, Digital Refresh enables delivery of brand objectives on the web, mobile and social media through communication and commerce applications, audio-video elements and customized digital solutions.

The company plans to use the proceeds from the investment to strengthen its expertise in content creation.

“Digital Refresh Networks has a highly capable team led by Ravi and Barin. The company has been able to acquire and retain quite a few marquee clients, which gives us a lot of confidence as far as business sustenance goes," said Mohit Ralhan, Managing Partner and Chief Investment Officer, TIW Private Equity.

Ravi Dubey, co-founder and Executive Director, Digital Refresh Networks, stated, “Our vision is to build a digital-first communication and commerce company which provides better ROI for brands across all platforms. We intend to immediately acquire full-service capabilities in digital content creation, and build competencies in platform and market-place management.”

TIW Private Equity is a sector agnostic, buyout private equity fund that focuses on consumption-driven sectors, and helps entrepreneurs improve their companies’ margin profiles. The Fund has investments in sectors across FMCG, media, education, digital platforms, financial services, real estate and manufacturing consumption, through multiple funds.

Digital Refresh Networks Private Limited (erstwhile, Digital F5) is a digital marketing firm with capabilities in Social Platforms & Interaction Management, Content creation, performance-based marketing, and customised digital product solutions, specialising in market-place management and e-commerce services.

L Catterton hires Khazanah executive Chinta Bhagat to head Asian funds

US-based private equity firm L Catterton has appointed Chinta Bhagat as co-managing partner and head of its Asia funds, it said in a statement on Tuesday. Bhagat, who worked at Khazanah Nasional Berhad, the sovereign wealth fund of Malaysia, will jointly lead the firm’s Asia platform along with co-managing partner Ravi Thakran.