Singapore’s Verge HealthTech fund closes maiden vehicle at $7.6m

Photo: National Cancer Institute / Unsplash

Verge HealthTech, a Singapore-based investment firm that targets health tech startups, has closed an over S$10 million ($7.4 million) maiden vehicle recently, the fund’s managing partner Joseph Mocanu told DealStreetAsia. “We closed S$10.2 million ($7.6 million) late last year,” he said.

Senior healthcare executives, successful entrepreneurs, business owners, and a few family offices have committed to the fund, according to Joseph. “They invest mostly in digital health, medical-grade IoT sensors, and diagnostic technologies.”

DealStreetAsia had reported in January last year that the vehicle had secured commitments to the tune of 85% of the targeted fund size. Verge HealthTech, which began fundraising during the fourth quarter of 2018, had originally targetted the final close for March 2020, which was delayed due to pandemic-induced disruptions.

“It really hit us because while healthcare was on everyone’s mind, the type of investors we appealed to had their own problems to worry about given many were still operating their own businesses. Those unaffected by the downturn, meanwhile, wanted additional liquidity in case some great bargains (i.e. distressed assets) came up.”

However, “this [the COVID-linked delay] was counterbalanced by our small target fund size which precluded us from approaching most institutional investors,” Joseph said. “The excitement around growth opportunities in Southeast Asia certainly helped us, but even more so there was greater awareness on the need for investments in healthcare, thanks largely to COVID-19.”

Founded in 2018, Verge HealthTech invests globally in technology-centric solutions that expand access, quality, and efficiency to healthcare in emerging markets. It seeks to make early-stage investments in companies that are engaged in disease prevention and management, and health system efficiency.

The fund has an average ticket size of $250,000 to $750,000, leaving some room for follow-on investments.

Verge HealthTech has so far made investments in 11 startups, of which five are based in Singapore and two are in Estonia with teams in Belarus and Poland. It also has a portfolio firm each in the US, Canada, Finland, and Taiwan.

Among these investments is Mobio Interactive, a Singapore-based digital mental health therapeutic startup. Verge HealthTech announced in September last year that it has backed Mobio in a $2 million seed funding round. Singapore’s Atlas Asset Management, US-based Creative Ventures, and US-based VC firm SOSV also participated in the fundraising.

Another Verge HealthTech investment in Asia is Papaya — a Vietnamese insurtech startup. The investment in February this year was co-led with BAce Capital, a fintech-focused VC fund that is backed by Ant Group and Alibaba.

The fund’s other most recent deal was in MX Labs in Estonia, also in February. MX Labs is a provider of AI-based health diagnostic tool for individuals.

“We expect most of our exits to be to multinational healthcare and/or technology companies via trade sale. We are seeing increased activity in secondary sales (I am going through one personally now with one of my angel investments) but we shouldn’t expect this to be the primary avenue.” said Joseph.

Spurred by the urgency created by COVID-19, health tech companies in Southeast Asia saw record PE-VC deal activity in 2020. The sector was the third most active in terms of deal count last year, showed data from our SE Asia Deal Review: Q4 2020 report.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.