Quadria founders float $10 mn fund for early-stage healthcare investments

The founders of healthcare private equity firm Quadria Capital have floated a Rs 65 crore ($9.75 million) venture capital fund to make early-stage investments in Indian companies, one of the founders told VCCircle.

The new fund, christened HealthQuad, will invest in healthcare companies through pre-Series A and Series A rounds of funding, Amit Varma said.

Varma founded Quadria, which focuses on South and Southeast Asia, along with Abrar Mir. They have sponsored the new fund and has set up a separate team to manage it.

The fund has already raised $6 million in its first close and expects to make the final close in the next three months. The sponsors brought in about 10% of the funds while the remaining was pooled in by family and friends.

Varma, who is also managing partner at Quadria Capital, said that the new fund has zeroed in on two companies and that it expects to close the deals this month. One of the companies is into healthcare hiring and also has web-based applications that aggregate patients. The second company is a single-specialty standalone hospital focused on kidney diseases, Varma said.

HealthQuad aims to invest in a total of eight to 10 companies in the next 12-18 months.

 “Our basic philosophy is that we like to be involved in the companies we invest in. We don't want to spread our money too wide and thin where we are unable to give any inputs,” Varma said.

The ticket size of the fund will range from Rs 1 crore to Rs 15 crore ($150,000 to $2.2 million). It will back firms across healthcare delivery services, life sciences, devices and medical technology, and health IT. The fund will also look at home healthcare models and startups that help in staffing, skilling and hiring of healthcare workers. However, it will avoid companies involved in drug discovery.

Varma said that opportunities in the healthcare sector are mainly centred on technology-backed services and products or theme-based or niche healthcare business models. He said that India’s healthcare industry has seen several disruptive business models and that these models, while still at an early stage, will likely evolve on the lines of those in developed markets, who have attained a size large enough to attract large healthcare players and investors.

The exit strategy of the fund, which has been registered with capital markets regulator SEBI as a Category I Alternative Investment Fund, will involve a sale to financial or strategic investors at an opportune time, Varma said.

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