venture capital: HealthQuad raises Rs 1,134.5 crore towards pre-final close of its second fund

Its initial fund size was Rs 550 crore, with a green shoe option of a further Rs 550 crore.

“The size of the fund is likely to increase by another 20-25% depending on investors’ agreement,” Charles-Antoine Janssen, cofounder and chief investment officer of HealthQuad, told ET.

“The way the sector is growing, it presents a large opportunity for funds such as ours. A larger fund will give us the ability to invest in more companies, write larger cheques and continue to support portfolio firms longer,” Janssen said.

The fund has received commitments from global financial and strategic institutions, including some global pharma and health-tech companies, development financial institutions and large European conglomerates, Sunil Thakur, Partner, Quadria Capital told ET. “80% of the fund has been raised from overseas investors, and 20% from domestic institutions,” Thakur said. A final close is expected by March 2022.

The company believes the Covid-19 pandemic has given impetus to the digital transformation of healthcare. With more than 175 million households having the potential to access digital healthcare, at least 20% of the healthcare transactions are expected to shift to virtual mode.

HealthQuad is backed by sponsors of Quadria Capital, a healthcare-focused private equity fund in Asia, and KOIS, an impact investment firm.

According to the company, India is expected to be the third largest economy with the largest population in the world by 2030. The rising population and a growing burden of chronic diseases (more than 100 million diabetic patients by 2030) has led to an explosive growth in demand for healthcare in the region.

However, with abysmally low healthcare spend (public healthcare spend is about 1.3% of GDP), mega healthcare challenges related to accessibility, affordability and quality of care continue to exist.

“We believe, with its large pool of talented doctors, coders and entrepreneurs, India is best positioned to develop an ecosystem of tech-enabled affordable healthcare solutions which not only solve the unmet needs of more than 500 million Indians but could also cater to more than 3 billion people in other low- and middle-income countries,” Janssen said.

Through HealthQuad, the firm is looking to back disruptive, technology-based and innovation driven businesses.

In 2016, it had raised Rs 75 crore under its first fund and invested Rs 250 crore along with investors in seven Indian companies, such as Medikabazaar, THB, Regency Hospital, HealthifyMe and Impactguru.

In an interview with ET in June, Quadria’s cofounder Amit Varma said the firm plans to deploy $400-$500 million (Rs 2,972-Rs 3,670 crore) in India over the next 18-24 months.