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Life sciences firm Esco sets up S$10m venture fund
[SINGAPORE] In a boost to the local startup scene, a Singapore life sciences tools and medical devices business with a global presence has set up a venture capital fund with S$10 million to be committed over three years.
Esco Ventures, funded internally by the Esco group of companies, will invest in early-stage opportunities in life sciences, medical and healthcare technologies.
Esco president and CEO Lin Xiangqian told The Business Times that he wants to use his operational experience to help local scientists and researchers commercialise their ideas for the global market.
"I have actual industrial and hands-on operating experience in life sciences and medical devices, plus access to the resources of our group - including a distribution and sales network painstakingly built up over the years which now covers more than 100 countries," he said.
"We can provide not only the usual incubation, mentorship and funding, but also access to product development, manufacturing expertise and a global distribution network."
He added: "Singapore is a small country between India and China and we can't compete on scale. So we have to innovate to create higher-value jobs."
Esco provides lab equipment for the life sciences industry, as well as medical devices for in-vitro fertilisation.
Mr Lin, 30, started working in the family business at age 13.
After completing secondary school, he re-engineered the company and developed Esco's life sciences lab equipment line from scratch.
Over the last 14 years, he has built Esco into a company that hires 700 employees around the world. He took over as group president and CEO in 2011.
Esco Ventures has an investment in a Danish and Lithuanian medical devices company, which achieved an unrealised return of five times his original investment in less than three years. The experience whetted Mr Lin's appetite for early-stage investing and helping startups bring innovations to the global market.
The biotechnology sector in the US has seen a surge in the past year, driving up valuations and deal activity.
Esco itself has received takeover offers from US and European multinationals, but has decided to remain independent, Mr Lin said. He estimates the market value of his company to be between S$100 million and S$200 million.
Other funds have been active in Singapore's startup scene. One of the more established life sciences funds around is BioVeda Capital.
New venture capital funds here have been tech-related, rather than focused on medical and life sciences. Monk's Hill Ventures launched in April this year with a S$100 million war chest to invest in tech startups across Asia. Golden Gate Ventures was set up in 2012 with an initial seed fund of S$10 million, focusing on consumer Internet products and services for South-east Asia.
Philip Lim, CEO of Agency for Science, Technology And Research (A*Star)'s technology transfer arm ETPL, said that there is more funding available now for startups than 10 years ago. But many are not ready in terms of their management and infrastructure to move on to the next stage, he said.
"The first million obtained by our startups is only enough to fund tech and product development.
"Series A investors (external investors who buy into startups for the first time) look for a management team that has more than a good chief tech officer (CTO). They also look for business scalability, which requires some infrastructure and perhaps some sales," he said.
"To create a critical mass we need a combination of peer learning and mentoring. The founders themselves need to broaden their perspectives, get out of the country, see the world, and build networks," he added.
"Emphasis should also be given to the products and their branding."