India Healthcare Opportunities Fund's coverage in Business Standard Kapil Khandelwal Toro Finserve LLP QuoteUnquote with KK www.kapilkhandelwal.com

1. MUMBAI (PRINTED 1N BHOPAL} 1 THURSDAY, 1s MAY 2011 BusinessStandard
help start-up
~nways
!0°/odiscountto Series-Avaluation
t
l
BRIDGE ROUNDS IN 2016-17
Date Company
A~r-17 Scootsy
Mar-17 Wigzo
Oec-16 OfBusiness
Oec-16 Sho~Kirana
Nov-16 BHIVEWorks11ace
Nov-16 Housing.com
Od-16 Ag!OStar
Od-16 PromOn
Od-16 Uniphore
SoftwareSystems
Aug-16 A~~Knox
· Jul-16 AppsOaily
Jul-16 Milk,Mantra
Jun-16 Bomba~ShirtCo.
Jun-16 Trave~aari.com
Mar-16 Box8
Mar-16 G!YFIO
Mar-16 CreditSeva
Feb-16 Vee
BRIDGE ROUNDS: AStMPSHOT
Year
2016
2017(YTO)
Noofdeals
16 '
2
Source: Venture Intelligence
Investors Amount($mn)
KhattarHoldings,AgnusCa~ital
AarinCapital,AdvantEdge
Partners, 30NE4Ca~ital
MatrixPartnersIndia, ZodiusCa~ital
Incubate Fund
BlumeVentures
SoftBankCar~
Aavishkaar, IOGVenturesIndia
NowCa~ital
IOGVentures India,
YourNest1others
JungleVentures
ZodiusCapital, Ru-NetHoldings,
KalaariCa~ital, QualcommVentures
EightRoadsVentures,Aavishkaar
RAAYGlobal Investments, others
GVFL
Mayfield
IOGVentures India
PixVineCa~ital, Others
lights~eed Ventures, others
Amount ($mn)
34
6-
4
12
0
5
3
0
2
2
1
1
3
2
1
0
Budgetingforbridges
Investors have started budgeting
forbridgerounds innewer funds.
"Ifwe hadinvested$300,000 ina
firm, we are willing to invest
$500,000 more ifthe business is
doingwell," says a partnerwith a
VCfirm.
"It was impossible to do a
bridge round four years ago. But
today, therearelotofchequewrit-
ers in the $250,000 - $500,000
range," says Red.dy of Blume
Ventures.TheseincludesmallVC
firms,family offices, and foreigri
investors like Beenext, M&S
Partners, Simile, and Dream
Incubator.
Often, one can find external
investorswhoarelookingatinter-
estingentrypoints-theyarewill-
ing to come in at a pre-Series A
priceand notSeries-Avaluation.
Bridge rounds are typically done
at 15-20 per cent discount to the
Series-A valuation, which is left
open_While thatisan idealsitua-
tion, in reality most investors
investing$500,000for an8-10per
cent stake in·a company want to
freeze the valuation. ·
Another driver for bridge
rounds is that there are far more
start-up at the top·ofthe funnel
with no major addition in the
number of players doing Series
A/B/Cfunding. Eventhough larg-
er VC firms like Sequoia Capital,
Accel have raised large funds,
they have large existing portfo-
lios tosupport and are lookingto
invest inless risky assets.
ToroFinserveto
launch$500-mn
realtyfund
RAGHU KRISHNAN
Bengaluru,17May
Private equity firm Toro
Finserveisraisinga$500mil-
lion fund to invest in real
estate for health-care enter-
prises. This is the first fund
focused onputtingmoneyon
infrastructure for ho,gpitals
and diagnostic companies in
the country, itsays.
India Healthcare
Opportunities Fund, which
has got commitment of $l10
millionfrom investors,hasan
investment committee with
advisors such as Dr Lal
PathLabs Chairman Dr
Arvind Lal, former Pfizer
India Managing Director
KewalHanda, andDrSampat
Shivangi, ex-c,hairman of
American Association of
Physicians of Indian Origin
(AAPI).The fund will havean
initial size of $250 million,
with additional leverage of
$250 million.
Investment opponunities
inIndia'shealthcareindustry
arehuge, owingtothelimited
infrastructure built so far.
Therearearound nine hospi-
tal beds per 10,000 popula-
tion, comparedto 39beds for
a similarpopulationinChina.
Indianeedsaroundthreemil-
lion beds to achieve the tar-
getof30bedsper10,000peo-
pleby2025, andanadditional
1.54 million doctors and 2.4
million nurses required to
meetthegrowingdemandfor
healthcare. For this, India
requires $200 billion invest-
ments on healthcare infra-
structure.
"For a medical entrepre-
neur, there are very limited
opportunities for funds, and
most ofthem are expensive,"
says Kapil Khandelwal, man-
aging partner at Toro
Finserve.
Toroisbuildinga modelof
sale-leasebacktransactionof
real estate assets for medical
entrepreneurs who are look-
Kapil Khandelwal, managjng
partneratToro Finserve '
ing to either set up one or a
chain of hospitals, old-age
homes or diagnostic centres
in the country. This would
allow them to free up capital
to deploy in their business
and focus on better returns,
Khandelwal says.
The firm has a pipeline of
$200 million investment
opportunities in hospital and
healthcare assets in the coun-
try. Toro is in talks with three
stategovernments to invest in
the fund. Totalinvestments in
India's real estate sector has
increased by40 per centfrom
$.3.8billionin20llto$.5.4 billion
in2016,withabulkofthemon-
ey invested in core office and
residentialassets.Theshareof
private equity investments in
2016 stood at 58 per cent last
year. Toro says real estate in
healthcareoffers an untapped
opportunitythat hasnot been
exploitedbyinvestorssofar.
The team has worked on
over $42 billion ofreal estate
transactions and $2 billion
worthhealthcaretransactions
globally, saysKhandelwal.
In India, hospitals are the
biggest segment and con-
tribute 75 per cent to the
healthcare market. The seg-
mentclocked12percentCAGR
du.ing 2012-15 to $63 billion.
Moreonbusiness-standard.com
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