Gobi Partners Co-Founder and Chairperson Thomas Tsao
In an era where healthcare accessibility and innovation have never been more crucial, Gobi Partners, a prominent Asian venture capital firm, recently strategically ventured into the Southeast Asian healthtech sector by investing in ORA (Malaysia) and ImmunoCure (Hong Kong)
Through these investments, Gobi seeks to reshape the landscape of healthcare services, particularly catering to the dynamic and youthful Southeast Asian population.
e27 spoke with Gobi Partners Co-Founder and Chairperson Thomas Tsao about the VC firm’s healthtech entry, goals, and Southeast Asia’s overall healthtech investment space.
Excerpts:
Can you provide an overview of Gobi Partners’ recent investments in the healthtech sector within the Greater Bay Area and Malaysia?
Gobi Partners’s recent strategic moves in Southeast Asia’s healthtech sector through an investment in ORA is aimed at improving healthcare access in the region. ORA’s unique direct-to-consumer model, tailored for Southeast Asia’s predominantly out-of-pocket healthcare expenditure, focuses on managing chronic conditions, setting the stage for potential disruption in the region.
Hong Kong’s emerging status as an innovation hub and the active role of universities as business incubators influence our investment decisions. Coupled with supportive government policies, these factors make the Greater Bay Area (GBA) and Hong Kong attractive destinations for Gobi Partners’s healthtech investments.
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Currently, most of Gobi’s healthtech investments are concentrated within the GBA, such as Prenetics, Biomed, PanopticAI, ScolioScan, Gense Technologies, and Immuno Cure.
What specific factors led Gobi Partners to enter the healthtech sector in Southeast Asia, and how does this align with its overall investment strategy?
In Southeast Asia, a rapidly growing and youthful population is displaying an increased focus on health, particularly due to the impact of the COVID-19 pandemic, as indicated by research from the Deloitte Global Millennial and Gen Z Survey. Within this sizeable demographic, there is a strong demand for reliable, medically approved solutions that inspire confidence.
Our new investee ORA is an answer to various “lifestyle” chronic ailments, including issues like hair loss, and notably streamlines access for the younger generation. With a track record of 250,000 consultations conducted, ORA boasts a comprehensive infrastructure and capabilities that encompass:
- E-pharmacy and clinic services that deliver prescriptions directly.
- In-house medical professionals offering telehealth consultations.
- E-medical record functionalities.
The potential within this market is substantial, particularly as ORA endeavours to extend its reach to address other chronic conditions like weight loss and to explore new territories, including regions like the GBA, where Gobi could offer significant value addition.
Could you elaborate on the key criteria Gobi considers when selecting healthtech startups for investment in the region?
We consider (i) what problem they are trying to solve, (ii) how effective the treatments are, where applicable, (iii) the regulatory landscape for the countries they are operating in, (iv) their gross margins and if they have the opportunity to improve over time, and (v) the competitive landscape in the region. Based on these factors, we will determine and pick the industry leader.
What unique challenges and opportunities have you encountered while investing in healthtech in this region?
Healthtech investments are still nascent in the region but have rapidly gained ground with 15 per cent of the private funding value as of H1 2022.
According to data from the SEAConomy report by Bain, Google, and Temasek 2022, healthcare costs have also been on the rise, with Singapore and Malaysia surging 9 per cent and 16 per cent, respectively, in 2022, allowing for new entrants to provide innovative solutions that are faster than traditional healthcare players.
The challenges lie in the occasional regulatory hurdles and legacy healthcare infrastructure, which are difficult to penetrate. However, Malaysia is planning to roll out a nationwide electronic medical record initiative to be completed by 2026, which can provide opportunities for startups to collaborate with hospitals and scale downstream solutions.
How does Gobi Partners plan to support the growth and development of the healthtech startups in its portfolio beyond just providing capital?
Gobi connects its entrepreneurs with a diverse network of executives, engineers, academics, industry experts, and other technology ecosystem stakeholders. This external network is an integral part of Gobi’s commitment to accelerating the learning curve for its portfolio companies and aiding them in establishing leading technology firms.
Through our market intelligence platform, Gobi offers vital support to entrepreneurs. This support includes strategic guidance, growth plans, and market adoption strategies.
Gobi’s global operating teams provide entrepreneurs with expertise and insights covering the entire spectrum of company building. Leveraging its strategic relationships with international conglomerates, Gobi aids its portfolio entrepreneurs in scaling their ventures. This assistance covers critical areas such as customer acquisition, partnerships, mergers and acquisitions, follow-on funding, and geographic expansion.
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As a result of these value-added resources accessible through its global platform, portfolio companies tend to achieve higher operating performance, experience accelerated growth, and realise more successful exits.
Given the diverse cultural, regulatory, and economic landscape in the Southeast Asia region, how does Gobi adapt its investment strategies accordingly?
Operating across 15 strategic locations, including Bangkok, Cairo, Dhaka, Guangzhou, Ho Chi Minh City, Hong Kong, Jakarta, Karachi, Kuala Lumpur, Lahore, Manila, Shanghai, Shenzhen, Singapore, and Surabaya, Gobi’s extensive network underscores its commitment to fostering entrepreneurship amidst diverse cultural landscapes.
Leveraging its international presence, Gobi is capable of:
- Identifying market parallels and investing in businesses with solutions that address common pain points.
- Incorporating innovation insights from Northeast Asia, applying lessons and metrics on tech innovation and investment best practices.
- Providing cross-border value-add to support businesses with market adoption, marketing, localisation, and scaling across ASEAN, South Asia, and MENA.
What are your aspirations and goals for its healthtech investments in terms of both financial success and societal impact?
As a predominantly Asian venture capital firm with US$1.6 billion in assets under management, we have diligently supported entrepreneurs from early to growth stages, focusing on emerging and underserved markets since 2002.
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Gobi’s interests lie in precision and personalised healthcare technologies, covering diagnostics, therapeutic treatments, and long-term care and recovery. These align with Gobi funds’ risk appetite and investment horizons, featuring a clearer path to commercialisation. Pursuing these technologies also offers potential for cross-portfolio synergies and value addition to limited partners’ businesses.
One of our main areas is Southeast Asia, where we eagerly seek, invest in and nurture the next generation of entrepreneurs. With a presence across 15 locations, notably in the GBA, we perceive significant potential in enhancing portfolio companies’ capabilities across Southeast Asia and tapping into the dynamic Northeast Asian markets for scaling or successful exits.
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Image Credit: Gobi Partners
This article was first published on September 5, 2023
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