For every startup able to launch a life-changing medical technology, there are many more which struggle to make the grade.
From proof of concept through productisation, trials and finally commercialisation, there are a number of hurdles for MedTech and life sciences entrepreneurs to clear. One factor can be the difference between success and failure at every stage: investment.
“Whilst we thought it would be easy to raise capital for these sectors, filled with companies seeking to make the world a better place, we found out it is shockingly difficult for innovators to do so,” Rupert Lewis, CEO of Oyster Venture Partners, tells TechBlast.
Co-founded by Lewis and executive chairman David D’Alton in 2019, Oyster is an advisory firm which supports these early-stage companies with their fundraising strategies. “We step in from Innovate UK grant funding investment and beyond,” explains Lewis.
“Being investment-ready is not just about having a good pitchdeck: it’s about having a compelling value proposition, a strong team and a credible roadmap to an exit for an investor.
“Despite healthcare being a highly invested area, matched only by financial services, there are low success rates of innovators easily securing investment early on. It was abundantly clear that whilst the many technologies we were seeing were outstanding, the way they were being presented fell short of that required by investors.
“Many investors state they would love to invest in healthcare; however, as soon as they are exposed to our deep tech client base, they realise they don’t have the skillsets or the in-house knowledge to digest the content without external advice.
“So if you’re talking about immunotoxicity, circulating tumour cells or platform therapeutics, for example, you’ll need to find investors who understand that part of the sector – otherwise you will be losing time.”
Pre-validation
Oyster has developed a database that consolidates data on life science and medical technology investments from across the globe then stratifies it into vertical domains, such as who is investing in what.
“When you get to market, you go straight to a pre-validated investor pool rather than losing time talking to investors who say they are interested but then can’t follow-up with the technical due diligence,” says Lewis.
The Manchester-based firm, which assists startups around the world, has adopted a mantra of ‘three Ts’ – team, technology and traction – when assessing the chances of success.
“From an investor perspective, can the team actually deliver a multiple of return for investors? Have they got the commercial real-world skills to navigate the potholes? Have they got the maturity and experience to deliver the hard numbers?” he asks.
“Is it technology that the market wants? What is the market saying about why it must have this solution? Is the IP protected, alongside a developed regulatory pathway, with qualitative data to prove the technology?
“Finally, we always see a positive shift in interest in a company that has traction in some form. It could be in the form of an MOU with a large pharma or digital player or health insurer. Or, even better, revenue!”
It aims to deliver on four verticals for clients: corporate finance, which is mainly focused on fundraising but also covers M&A; scientific advisory board ‘as a service’, helping to properly support its clients’ propositions via sector specialists; data valuation, a new service which helps clients to unlock the value of substantial datasets within a business; and B2B marketing.
Impact of COVID-19
COVID-19 proved something of an enabler for Oyster, which now has a team of eight staff.
“Through the pandemic, Teams and Zoom have been great for VC engagement as we can now talk to investors quickly and easily rather than having to present in-person on roadshows,” says Lewis.
“Technology now gives us wide access to the global market and so we became a global business, with clients on all four continents and access to investors worldwide. We regularly connect with investors from the US, through Europe and into Asia.
“I believe we will have a fundamental impact on innovating life science, supporting the bringing of their novel technologies to the healthcare market faster, better and cheaper.
“What excites us most is that we have helped companies who now have their technology in the market improving the lives of people across the world.”