Entrepreneurs need to be strategic in deploying funds: Anand Govindaluri, Govin Capital

Anand Govindaluri speaking at Bio Asia 2014.

Anand Govindaluri, a former investment management executive who’s served stints with Temasek Holdings and ETPL, the commercialisation arm of Singapore government agency A*STAR, forecasts significant growth coming for the startup/VC ecosystem in the city-state and broader ASEAN region.

The principal of Govin Capital is an enthusiastic advocate of the region’s entrepreneurial ecosystem and migrant entrepreneurs that fuel it, arguing: “Startup visas are going to be a game-changer for economic growth of any country and I think it is extremely important to have a separate startup visa policy. In my opinion, Singapore must actively pursue a startup visa. They already have a startup visa programmes which have been implemented. There’s an entrepreneurial visa that has to be increased.”

He adds, “It has to be fully enabled so that the ecosystem becomes a force to be reckoned with for the growth of the entrepreneurial ecosystem.”

Govin Capital’s investment themes revolve around education and social entrepreneurship, with a portfolio fo about 40 firms operating in the fields of Information communications, engineering, aerospace, biotechnology and medical technologies. One of their more recent investments in Singapore was in edtech startup Cialfo, which aids students in university admissions.

In an interview with DEALSTREETASIA, Govindaluri discusses his views on entrepreneurship policy, startup culture and social enterprises.

Edited excerpts:

Which qualities does Govin Capital seek in its founders?

Govin Capital was born with the intention of promoting the startup ecosystem in Singapore and also to bridge a very effective innovation gap between Singapore and India. So we focus on startups in Singapore and in India. We are fortunate to have very good patterns in Govin Capital. I’ve got people from the industry with at least several years of experience of building businesses into large-scale enterprises and managing large scale enterprises.

I believe that one of the biggest fundamental value that we bring to a startup is the go to market strategy and the hands-on active mentorship model that we specialise in. Typically if we invest in a startup, to a range of what is required for value, inflexion to be raised. So whatever is required for a value inflexion we will invest till that particular point in time before we hand it over to the next investor.

In terms of fundraising, what would you say is your focus? 

For me I think, what is important is that a startup entrepreneur has to focus on both raising funds as well as using the funds and deploying the funds in the smart strategic manner so that the company businesses are viable.

At the end of the day, let’s not forget that the fundamental metrics of any startup is their ability to generate revenue and profit. So if a business is profitable through its smart strategies that it adopts, by year 2 or year 3, to me that is a much more lucrative startup to invest in as compared to someone whose actually raised lots of capital and is not profitable.

Any views on how the local startup ecosystem will progress in the next few years? 

Very strong. I think despite the developments happening across the globe, the ecosystem in Singapore is less affected in my opinion because you have first of all a vibrant entrepreneur culture and you are in the middle of two economies which are doing well I would say,

You have growth – though there is a slowdown in the Chinese economy – but in the startup culture and in the startup scenario, it’s more to do with not just funding but also the ability to execute a business plan.

And in general, the entrepreneurial ecosystem is very well developed and sophisticated in Singapore. So the people are actually able to cope up the challenges happening across globally.

Any view on the Singapore government policies with regards to its startup ecosystem? 

In Singapore unlike in many other countries, basically, the government acts more like a facilitator. It is a catalyst, a very important catalyst and an enabler for very good policies to be implemented for the success of an ecosystem. And I think the Singapore government has done a tremendous job in terms of implementing some benchmark policies as to how entrepreneurship and startup policies must be implemented in Singapore.

It begins with very fundamental aspects like the opening of a company and closing of a company. It begins with fundamental policies with respect to raising of capital, what kind of shares to be issued for startups and I think the whole process of taxation is also simplified for startups and incentives for startup investors that are basically given to participating in startup investing in Singapore.

What’s your view on 3D bioprinting and the impact of pharmaceutical 3D printing on emerging markets? 

So before we go into 3D bioprinting, in general, the biomedical sector is a very robust sector growing at the double-digit growth rate. There’s huge potential for the biomedical sector to add value to the economy of Singapore. In my opinion, the Singapore economy is going to be resilient in the biomedical sector and we need to produce more biomedical entrepreneurs.

It’s not just the scientists we have to focus on. We also have to focus on producing good managers of science and good managers of business and hence the intent of coming up with programmes in biomedical entrepreneurship and innovation management.

I’ve always believed that Singapore. The world is looking to what Singapore has already done yesterday. So while everybody’s talking about innovation management, Singapore is already actually one of the leaders in not just innovation management but also innovation maximisation.

So we are talking about how we can commercialise technologies from the lab to the market and maximise the value coming out from this ecosystem. So specifically with respect to 3D printing, 3D printing in the healthcare industry is going to, again, be an instrumental technological breakthrough innovation in my opinion.

It’s already been demonstrated in certain cases be it in dental implants, prosthetics or in areas whereby it will have a phenomenal impact, not just in terms of cost but also in terms of productivity.

I think the provision of medical care in emerging markets using 3D printing will take some time but because we are still at a nascent stage but its already been proven that 3D printing is one of the important technological breakthroughs that will benefit the healthcare industry in the long run.

What’s your take on social entrepreneurship, given your own social enterprise efforts? 

We believe that one of the core focuses of Govin Capital has been to also identify opportunities in the areas of social entrepreneurship. So social entrepreneurship basically becomes extremely important, because whatever we do has to have a beneficial impact for society and we try to help society by using technological innovations that we have actually invested in for the benefit of the society.

So be it in basically in health care. In health care we believe we are making some significant impact in treatment of lifestyle disorders like diabetes, maybe in identifying treatment for myopia, eye related disorders or even basically we have a startup company which is focused on improving fertility management and improving chances of reproduction. So I think whatever the technological innovations that we make, all the investments that we make must have a social societal impact angle.

How do you exit a social enterprise? 

The exit strategy for a social enterprise is essential – whether it’s a social enterprise or whether it’s a for-profit enterprise – let us be very clear that fundamental metrics of business being viable will remain the same. So you have to make the business viable.

You’ll have to focus on the operating metrics. You’ll also have to focus on basically go-to-market strategy and the scaling up of the businesses. So the exit strategy of a social enterprise will be to merge it with another enterprise where it can add significant value.

What advice do you have for social entrepreneurs? 

In a model like that, the core thing would be scalability, the ability to scale up and to create a monumental impact in society is extremely important. So in the case of Mohammad Yunus’s work, not only was it disruptive, but it was also innovative. And it was able to touch millions of hearts and millions of lives and that’s a kind of business one should get into when it comes to social enterprises.

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