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Biotech and medtech seed funding: what lies ahead?

The 4th annual Biotech and Money/Medtech and Money World Congress will offer insight into the investment landscape for biotech and medtech companies via a series of panel discussions with leading investors in the sector. Those attending the two-day event in London can hear from experienced investors about the current state of funding for life science companies at varying stages of development. This includes a focus on seed funding, with panel discussions on ‘Seed funding for biotech development’ and ‘Pan-European medtech seed funding’.

The seed funding for biotech development panel discussion will feature: Søren Møller, Managing Partner at Novo Seeds; Frank Hensel, Senior Investment Manager at High-Tech Gründerfonds; Piyush Unalkat, Head of Technology Transfer at EIF; Alain Huriez, Chairman and Managing Partner at Advent France Biotechnology; Gerry Maguire, General Partner at Atlantic Bridge; Moderator: Savvas Neophytou, Head of Life Sciences at Deepbridge Capital.

The Pan-European medtech seed funding panel discussion will feature: Antonio Sánchez-Cordero, Operating Partner at accelmed; Alexia Perouse, Chief Executive Officer at iBionext Growth Fund; Christoph Ruedig, Partner at Albion Capital; Claudio Rumazza, Partner at Innogest; Martin Pfister, Senior Investment Manager at High-Tech Gründerfonds.

Ahead of the conference on 5-6 February 2018, Biotech and Money caught up with some of the panellists to learn more about the latest developments in biotech and medtech investment in Europe, what would be required to enhance investment opportunities for emerging companies, and what they wished more start-ups kept in mind while seeking seed funding. The following presents a small snapshot of their insights on these topics, which will be delved into in further detail during February’s panel discussions.

Pan-European medtech seed funding: panellist preview

A shift in focus

The funding climate for medtech companies has become more challenging over the last few years, as the VC environment’s focus has moved towards biotech, explains Martin Pfister, Senior Investment Manager at High-Tech Gründerfonds. “A couple of years ago, people tended to invest more in medtech because they thought it would be faster to market, but it has shifted more towards biotech and this is a problem for medtech companies raising money,” he adds.

Meanwhile, medtech start-ups have also generally not shared in the increase in funding available for tech start-ups, notes Antonio Sánchez-Cordero, Operating Partner at accelmed. “Unfortunately, with certain exceptions, the European medtech space has not benefitted in the same way as the general technology and software space from the growth of incubators and VC funds,” he says.

Bolstering Europe’s seed funding environment

So, what steps could be taken to improve the situation for medtechs seeking seed capital? As Sánchez-Cordero notes, there is no magic bullet. However, he suggests facilitating relationships between start-ups and the public healthcare system so that young medtech companies can learn and develop the most effective solutions while also generating traction at an earlier stage and at a lower cost.

There are other measures that could be initiated from within the sector, such as medtech companies and VCs proactively highlighting success stories, says Pfister. This might take the form, for example, of case studies about successful exits, IPOs or business development.

The regulatory environment is another area where some panellists have identified barriers to medtech funding and development. A more risk-based, pragmatic regulatory approach could help new technologies come to market, in turn providing greater patient access and potential improvements to many patients’ lives, says Christoph Ruedig, Partner at Albion Capital.

What to know when raising funds

For those medtechs seeking seed funding, there are some key criteria that investors would encourage greater awareness of. For Ruedig, this is realistic expectations of the length of time it takes to develop a product, the time it takes to be adopted, and the amount of money required to facilitate this.

The team, of course, is also a critical component. Pfister says: “You have to make sure, no matter what the technology is, that you have convinced the investor that the team will be able to do the job and be successful. Even if you don’t have a full team, which is often the case in early seed stage funding, you have to know what [talent] you are missing so that in one, two, or three years you might add in C-level management or a seasoned business development person.

When it comes to the product itself, the focus should be on solving problems in the healthcare ecosystem rather than developing ‘cool’, albeit fascinating, technology, adds Sánchez-Cordero. “It makes a huge difference in raising funds when the team has been working on the business case from the early days and has taken the stakeholders into consideration during the product development phase,” he explains. “At the same time, I wish investors would recognise the value of basic and sound approaches to healthcare innovation that do not necessarily include buzzwords like AI [artificial intelligence], blockchain or VR [virtual reality].”

To read the full medtech seed funding panellist preview and to hear initial thoughts from the biotech seed funding panellists, download the white paper Biotech and medtech seed funding: what lies ahead? 

DOWNLOAD THE WHITE PAPER

The 4th annual Biotech and Money/Medtech and Money World Congress will take place on 5-6 February 2018 at etc.venues, 200 Aldersgate, St Paul’s, London. Find out more here. 

Louise Fordham
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