India now has at least 2,56,611 confirmed coronavirus cases, with 50,000 of them coming in the last five days alone. More than 7,135 people have succumbed to the highly contagious virus that has put the healthcare system under a lot of strain. Coronavirus testing kits are proving to be a bottleneck as India tries to contain the outbreak. The lack of kits points to a bigger problem—the absence of innovation. It is only now that the country is experimenting in the healthcare-product domain. Dr Taslimarif Saiyed, chief executive officer and director of the state-run science start-up accelerator Centre for Cellular And Molecular Platforms (C-CAMP), tells Moneycontrol’s Priyanka Sahay why India remained a service-providing nation, didn’t focus on deep-product innovations and how things are changing now. Edited excerpts:
Q: What is the biggest asset Indian entrepreneurs have right now?
These are challenging times. One cannot deny that the whole system is being challenged big time. However, while all of this is happening, strength has also emerged. The healthcare system, which was heavily reliant on international capabilities, has actually begun to work from India, in terms of building those capabilities from here. And that is going to be one of the biggest assets coming out of this situation–India would be hoping we build on this momentum rather than lose out on this momentum.
There is a systemic belief, which has happened, where entrepreneurs or innovators have attempted to seek larger challenges. They are building solutions for COVID-19 head-on.
Traditionally, we never productised anything. Our ratio of conversion of developed prototypes to productise or product selling good opportunity in the market was absolutely bad. Now the completion of this circle has happened.
People have realised that the bottom line is to get products in the market. So that would be one of the strengths or assets that we have built-in terms of systemic belief. We can build products and come to market within two months.
Q: Why did India wait for something as big as a coronavirus pandemic to come to this conclusion?
I completely agree with you. It is a million-dollar question. So, two things happened. We always played the competitive advantage of either cost or better language, and so on. We never had the technology development angle on it. It was being developed somewhere else. We were just using the competitive advantage doing the background work and that actually worked well. We were always a service industry rather than a product or technology industry as a nation.
The shift is happening but slowly and steadily.
When somebody attempted from here first, the quality was not at the level as compared to that of the US or European markets. When it came to lowering costs, somebody from the eastern part of the world, possibly China or Korea, would say they had an even better cost. We never had a competitive edge even if we developed a small product. It requires investment in science and technology for the long years. To be able to do this, I think, we have waited for the time but possibly a lot of people, including central leaders right now, hope that this will actually be the fulcrum of many things to come.
Q: Compared to ecommerce, which raised multi-billion dollars in the last few years, healthcare has barely raised $4 billion in a decade. And even then the bulk of funds has gone into commerce and not in product development. What kept investors away from product startups?
Primarily Indian venture capitalists (VCs) have stayed heavily away. There are multiple reasons. When you raised funds from your LPs, there was no pipeline to show that these are deep-science phenomenal tasks happening already. Then, most VC heads are either people who have led IT firms and possibly had a better understanding of that.
Indian startups that did well went to the US or Europe. Indian investors are completely risk-averse in terms of funding deep science and other risky ideas. Earlier, we used to have brain drain and this phenomenon led to an innovation drain.
So yes, I completely agree it hasn’t been there but is it going to change. I am optimistic about it. People have been looking at it. International VCs are coming to India.
At C-CAMP, we have partnered with Japanese fund Beyond Next Venture and we are going to fund risky ideas with that. We are also going to partner with another Silicon Valley venture capital fund. The Japanese fund has the potential to put around $100 million outside Japan. They have already committed $5 million, which is a small amount as a first seed fund and are going to do follow-on rounds.
Now funds are of the opinion that we may not possibly know but you guys seem to have gotten something right so can we work with you. It’s like getting into a hybrid mode until you have pure-play funders in the life sciences and healthcare, which is going to happen.
Q: How is your accelerator different? Your tagline says: “The world needs your innovations now! We are here to help”.
We have several mission-driven approaches. The accelerator was there for the last two months. We saw that we didn’t have an answer even though we had three months of timing after the outbreak in China. It (Covid19) happened in December but we didn’t have an answer to how we are going to test our people. People landed in Bengaluru directly from Italy and did not even get tested for temperature control. They wanted to get checked but we were not ready.
We realised we were not ready and neither the US nor Europe will give us testing kits. Where would out testing kits come from?
As of today, we do not have testing kits that is why Delhi is saying that we will not do asymptomatic tests. Right now, we are struggling at the national level. Here is where we needed our own players.
The accelerator was to look at our own backyard, find out who’s the best from our backyard. Work with them and make them visible. This was a short-mission driven game. It was to only be delivered within two months.
Q: How many startups got selected by the accelerator?
In a month, we got 1,100 submissions. A lot of interesting innovations came out. We selected 30 and 18 are in the field already, these have been commercialised. Health is a state subject. So, many state governments have also begun to purchase from them.
One of the innovations is that of a non-invasive ventilator, which allows ventilation support but without intubation. It provides support to non-severely impacted patients.
Ventilator-associated pneumonia happens because of the intubation. So while you actually put them on a ventilator for the respiratory support, they acquire infection.
Q: So how difficult is it to attract foreign and domestic investors now?
C-CAMP is actually an initiative of the department of biotechnology to play the role of an enabler, a catalyst for high-end research and cutting-edge innovation. We have three verticals. One is for technology platforms that we work with researchers from academia-industry and take their science to the next level.
The second vertical is entrepreneurship, where there is a lot of these quick simple philosophies because of our scientific understanding of these kinds of risky ideas and see if some of them work and handhold them. We did that for the last right-10 years.
We have an understanding of how an idea converts into an application. Now as we have a body of work, we have been lucky enough as investors come and talk to us. And say you have a good pipeline, how do we work with you.
Q: Now that we are sitting on a time bomb and investors from overseas have also started to show interest. How do you think this process will move?
I think it’s going to change significantly. To begin with, I think our engagement with international companies and the system is not going to open up suddenly. It’s going to be a slow process.
As it will take time, we will need to rely on internal things because of which a lot of machinery has been oiled up very nicely. There’s a lot of inter-departmental, inter-ministerial big picture innovation happening.
What investors are seeing is that we can deliver and hopefully that will start bringing some money. The government has understood that they have to keep their innovation capital ready and keep funding them to respond to this time.
That is going to happen in academic science as well as entrepreneur aspects of it.
India’s problems are different from global problems. They require an understanding and indigenous innovations are the best solutions for them, COVID or not.
Q: How much capital has the government set aside for these investments?
We have a fairly good system to support startups in the early stage, which is in the range of $50,000 to $150,000 for each startup. So, that system is working well. And once they grow, the hope is that VCs will fund it but that is a bit weak.
We need to proactively work with investors, when they come, let’s not say ‘okay this is our data, you choose the one and go’, rather we work with them and tell them why they can get excited about this and we work together to fund.
This is where our real challenge starts. I don’t think there are funds that can give anybody $5-20 million for now. In India that’s not happening for risky ideas.
I have personally sent many notes to the government where a case has been made saying that right now private species are not coming can we have a scheme to augment their funding. Can we have a risk-idea fund or deep-tech fund for the first two years or three and see if other VCs come? We have to come up with a solution if we want to retain the best of our innovations.
Q: How has the overseas investor community responded? What are the startups you are looking at?
Every week, I get a call or two from people looking to collaborate on funding startups, both nationally and internationally. There is very solid interest from Japan. They are looking at India very closely then, of course, the US and Europe.
We are looking at startups across fields. Innovators should look at maternal and child health, where India suffers heavily. Agriculture is one sector which we talk about all the time but we don’t see groundbreaking innovation.
Anti-microbial resistance is another promising sector. We will be very delighted to support startups in these and other areas as well.
Q: When will these startups get to the commercial stage?
It depends on what kinds of sectors you are working on but a few of them will possibly have products in a couple of years, some will take longer. –Moneycontrol