MedTech Innovator seeks to spotlight Asia-Pacific startups to investors

Singapore

MEDTECH Innovator, a US nonprofit accelerator, is bullish on Asia-Pacific's young ecosystem of medtech startups. And it wants to highlight their vast potential, even as investors have turned cautious amid Covid-19, the firm's chief executive Paul Grand told The Business Times.

The accelerator, whose Asia-Pacific headquarters is in Singapore, hopes to match more of the region's startups with medical giants for mentoring and global investors for funding. While digital health has exploded in Asia-Pacific, there is room for more innovations to be funded.

"The gaps, I would say, are in more complex devices... (such as) implants for the eye, cardiovascular technologies, transcatheters or mitral valve replacements that are inherently very expensive and require a long time to develop and bring to the market," Mr Grand said.

"Those are the segments where it's not that there isn't innovation; it's just those innovations are going to have a lot more difficulty raising capital in the Asia-Pacific region."

Started in 2013, the California-headquartered accelerator connects medtech startups with corporate mentors and investors, culminating in a competition. Winners receive prize money and additional non-dilutive funding, along with other resources.

MedTech Innovator launched its Asia-Pacific programme in 2018, in partnership with the Asia-Pacific Medical Technology Association, and with Johnson & Johnson (J&J) as a key corporate sponsor. Of the 20 companies selected to participate in this year's Asia-Pacific programme, seven are from Singapore.

They include Credo Diagnostics Biomedical, which is developing rapid diagnostics tools for diseases including Covid-19; Recornea, which is developing a metal implant for deformed corneas; and X-ZELL, which merges cell detection technology with AI to identify cancers at an early stage.

Venture investors have typically shied away from medtech, because of the complexity and lengthy time to market. While appetite has picked up for solutions that address Covid-19, securing capital is still difficult for many others, especially those tackling elective surgery.

"One of the key problems is that the (early-stage) investors in Asia-Pacific, in our experience, want to find things that can get to the market quickly for not that much money. And that means, things that are more inherently digital, are disposable and low-cost have an advantage," Mr Grand said.

While funding for cancer treatment has remained strong amid the pandemic, other areas like orthopaedics, where patients can delay their procedures, have been neglected.

However, more investors in regions such as North America and Europe are beginning to see the untapped potential of such segments in Asia-Pacific medtech - especially those that cater to massive markets such as China, India and Indonesia. While the Covid-19 outbreak has restricted travel, these investors are now more comfortable with getting to know startups over video calls.

"They're realising that they don't have to drive to a company in order to get to know them and to have an impact on the company. So I expect to see investors increasingly interested in the Asia-Pacific region," Mr Grand said.

Some of MedTech Innovator's US partners have even stayed up past 11pm just to catch the Asia-Pacific pitch events. "Not only investors, but also some of the big hospitals which are looking for innovative medical technology are saying, 'Hey, I'll stay up and join your Asia programme as well'," he added.

J&J shares MedTech Innovator's vision "to help foster a robust medtech ecosystem across Asia-Pacific", said Tim Schmid, company group chairman for medical devices, Asia-Pacific, at J&J.

J&J provides coaching to some of the companies in MedTech Innovator's Asia-Pacific programme, and also awards one company in each cohort a one-year residency at its latest healthcare incubator for the region, JLABS@Shanghai.

J&J Medical Devices has also committed to sponsor the Asia-Pacific programme through 2022.

"Asia-Pacific is home to half the world's ageing population and, with that, half the burden of chronic conditions such as heart disease, stroke and lung cancer. Yet, it represents only about a quarter of the global medtech industry," Mr Schmid said.

He reckons that there is "no doubt" that an increasing share of global medtech innovation will come from Asia-Pacific.

"There are significant unmet health needs in the region, but also a real opportunity to change the trajectory of healthcare," he said.

Looking ahead, MedTech Innovator may expand its presence in other Asia-Pacific markets, such as Australia and India, in the long term. "We really see MedTech Innovator as a catalyst for strengthening the ecosystem... We want to bring more investors, more partners, into what we're doing," Mr Grand said.