Genomics-based diagnostics and research firm MedGenome Labs Pvt. Ltd has raised fresh funds from new investors, HDFC Ltd and its associates, in a rare bet for the financial services giant in India’s new-age healthcare space.
The investment completes MedGenome’s Series C round of funding which totals $40 million (Rs 260.3 crore), the Bengaluru-based company said in a statement on Monday.
HDFC Ltd along with its insurance arm HDFC Life and asset managment firm HDFC Asset Management together put in $10 million, a company spokesperson said.
MedGenome had raised $30 million (Rs 192 crore) at the beginning of its Series C round in August last year. The fundraising then was led by its existing investor Sequoia Capital and new investor Sofina SA.
The company, which has completed over 100,000 genomic tests, will use the fresh capital to expand to Tier II and Tier III cities and make critical genetic tests like noninvasive pre-natal screening (NIPT) and new born genetic testing accessible in these regions, it said. The company plans to establish more genetic centres in hospitals across the country to support clinicians and to enable patients to take informed decisions, it added.
"We believe understanding genetic information can have a big impact on the Indian healthcare industry through early detection of disease risk and development of new medicines," said Deepak Parekh, chairman, HDFC Group, in the statement.
MedGenome’s goal is to significantly reduce the burden of inherited diseases in India and assist clinicians in implementing precision medicine, said Sam Santhosh, founder and chairman of MedGenome.
The company, which operates as a subsidiary of Kerala-based SciGenom Labs Pvt. Ltd, had raised $4 million in its Series A round from Emerge Ventures and Papillon Capital in 2013. Subsequently in 2015, it had raised a $20-million Series B round of funding from Sequoia Capital.
The genomics and high-end diagnostics segment is at a nascent stage in India, but it has been attracting private investments for a while now.
In March last year, iGenetic Diagnostics Pvt. Ltd, which focuses on specialised and differentiated tests, had said that Manipal Education and Medical Group, and UK-based development financial institution CDC Group Plc had pumped in Rs 133 crore in the company.
In December 2016, Gurgaon-based Core Diagnostics Pvt. Ltd had raised $12 million from private equity firm Eight Roads Ventures and US-based F-Prime Capital Partners. Its existing investor Artiman Ventures had also participated in the funding round.
India Inc’s attraction for healthcare
HDFC Ltd’s investment in MedGenome is significant as direct bets in India’s emerging healthcare sector from corporate institutions are rare.
Last year in April, Mahindra Partners, the private equity arm of the Mahindra Group, invested in Medwell Ventures Pvt. Ltd, which operates home healthcare firm Nightingales Home Health Services Pvt. Ltd.
HDFC, which commands a market cap of Rs 2,96,862.13 crore, is, however, not new to tapping into the startup ecosystem in India.
It houses an alternative investment practice that has property funds under its fold. It is also known to have limited partner (LP) exposure to a bunch of India funds.
Last year, its banking arm HDFC Bank was reportedly launching a $25-30 million (Rs 161-194 crore) fund to invest in early-stage ventures.