Exclusive: Digital healthcare focused investor Healthquad ups second fund target corpus to $100 mn

Riding on the impetus to the digital healthcare sector from the pandemic, Healthquad, a venture capital firm focused on the sector has increased the target corpus for its second fund to $100 million. The firm aims to complete raising commitments for the fund later this year.

The Delhi based firm had earlier set a target of $75 million for the second fund. 

“We are overshooting the target corpus quite significantly. The pandemic made the need very clear. It accelerated and grew the immediate potential of digital health. By doing that it improved the returns of our investments in the space and the overall potential of this space going forward. And as a result of that, it awakened interest from limited partners (LP) around the world who want more exposure to this segment,” Charles-Antoine Janssen, co-founder and chief investment officer of HealthQuad, told TechCircle.

The firm marked the first close of the second fund with LP commitments worth Rs 514 crore ($68 million) in July last year.  

The firm plans to make 12 investments from the new fund and will invest across the seed and Series C stages, though its sweet spot will be the  Series A and B stages. It will focus primarily on digital health, medtech, and ancillary healthcare products.

The second fund’s target corpus is nearly nine times larger than the firm’s $11.6 million debut fund raised in 2017.

The fund’s LPs will be a mix of domestic and global investors, including pension funds, insurers, banks, international healthcare firms and some family offices.

“The ecosystem has grown. Five years ago, a lot of the companies in the Indian healthtech ecosystem were fairly immature and hence, it was difficult to deploy more than Rs 5-40 crore. Now that we have an ecosystem that is more mature and some companies that have significantly scaled in terms of operations, revenues and valuations, there is space for investment up to 100 cores,” Janssen said.

Healthquad was launched in 2016 by Amit Verma and Abrar Mir, founders of healthcare investments focused private equity firm Quadria Capital. Verma and Mir continue to run Quadria Capital as its managing partners.

Healthquad’s first fund made seven investments, including clinical research and data analytics startup THB, clinical genomics and biotechnology research firm Strand Life Sciences, and medical supplies marketplace Medikabazaar.

The firm is currently finalising three deals for the second fund which will be closed before June.

“We are looking at the entire journey of a patient from wellness to prevention to therapeutics and rehabilitation. Any startup  that is looking to create products which serves this journey is what we are looking to engage with,” Pinak Shrikhande, director at Healthquad, said. A majority of the investments will go into digital enablement of healthcare models, he added.