The biotech industry in India, which was totally deserted by venture capital (VC) and early stage investors, have a reason to cheer. In line with other angel investor groups such as Indian Angel Network and Mumbai Angel Network, the biotech industry in India has formed a new one — Biotech Angel Network.
The entrepreneurship committee of ABLE (Association of Biotechnology-Led Enterprises) has given shape to the angel network last month. ABLE represents Indian biotech industry.
Kiran Mazumdar-Shaw, chairman & managing director, Biocon, said, "Angel investment has always played a catalyst’s role in every entrepreneur's business journey. It spearheads the risk-taking path. Biotech needs angel investors to bridge the critical gap between government seed funding and VC or bank funding.”
Viren Mahurkar, executive vice-president & head - healthcare, investment banking with ICICI Securities, said, "Our idea behind the initiative is to find investors or HNIs (high net worth individuals) with money as well as knowledge on biotech industry — such as promoters of pharmaceutical companies, expatriate Indian scientists." We look for investments in range of $1 million-2 million each, he added. Mahurkar is the chairperson of ABLE’s entrepreneurship development committee.
According to a VCCedge data, last year saw two VC deals and a PE deal in the biotech sector, against no deals in 2011 and four PE deals worth $19 million in 2010. The biotech sector in India saw eight VC deals worth $55 million and 11 PE deals worth $43 million in the last five years. However, 2012 witnessed 172 VC deals worth $1.1 billion. Nitin Deshmukh, CEO, Kotak Private Equity, said, "While there are a couple of angel networks in the country, they are pretty much focused on technology, e-commerce and consumer businesses. The primary reason being that all these networks have successful entrepreneurs in similar businesses.” Deshmukh is former director general of ABLE and currently a board member.
“Such investments require very specialised knowledge and insights of the life sciences sector, which this angel network could be expected to have besides the required mentoring skill sets, " Deshmukh added.
According to the ABLE report, in 2011-12, the Indian biotech industry registered 18.5 per cent growth, recording Rs 20,440 crore in revenue. The industry has registered a CAGR of 14.75 per cent in the last five years.
Apart from Mahurkar and Deshmukh, Sunny Sharma, senior managing director, Orbimed Advisors, a US-based PE firm, who had worked in the healthcare investment banking group of Lehman Brothers in London, is also one among the key figures behind the initiative.