Singapore-based SGInnovate has a unique multi-stakeholder business model focused on identifying and funding Deep Tech startups. CEO Dr Lim Jui now plans to increase the group’s activity in advanced manufacturing and “wetware” — drugs and diagnostics — as firms increasingly are able to revert to pre-COVID business plans.
A steady stream of COVID-19 cases in Singapore has been seen in recent months, but unlike in many other advanced economies, incidence has decreased dramatically: since January, community cases have ranged from zero to four daily, and infection cases in travellers have averaged in the low teens — all of which being detected at testing on arrival and during quarantine.
For a highly urbanised parliamentary democracy of 5.5 million people and a population density of 8,136 per square kilometre (third in the global population density rankings), it is a big achievement. Singapore is both a global business hub and the biggest seaport in Southeast Asia.
In fact, the average caseload of COVID-19 has been low in international comparisons since the 2020 APACMed meeting. That was when an In Vivo-hosted panel asked a group of investors, including Dr Jui Lim, CEO of SGInnovate, about the impact of the pandemic on the MedTech and HealthTech investment activity he leads at the organisation.
Later, Lim expanded on those themes for In Vivo, and described the role that SGInnovate, a private organisation wholly owned by the Singapore government, plays in the local discovery and funding ecosystem. Lim sees its remit as helping scientists build Deep Tech startups to solve local and global health care problems.
In the newest example of this approach, SGInnovate was this month a co-investor in Deep Tech startup Bot MD’s raising of $5m (led by Monk's Hill Ventures), to further develop the markets in Asia-Pacific for its artificial intelligence-based clinical assistant for doctors. The technology has seen high demand during the pandemic.
The Bot MD co-founder is Dorothea Koh, who said the AI tool modernises clinical workflows without the need to adopt entirely new hospital systems or change existing workflows. Another example is the National University of Singapore (NUS) incubated Breathonix, whose recently launched non-invasive breath test is said to detect COVID-19 within a minute.
Singapore’s approach to COVID-19 control has been among the most effective on a global scale. In fall 2020, the country was already allowing business events of up to 50 people, provided that social distancing rules were adhered to, Lim noted. The wearing of a mask outside and keeping to a maximum group size of five were small prices to pay to be allowed such freedoms, said Lim. “It feels almost normal,” he said of the requirement to wear masks.
The country’s relative success with COVID-19 is down to a high degree of trust in the government, whose response, while “not perfect, “was data driven and logical,” Lim suggested. Contact tracing was accepted by the population, and early fears over the virus being “imported” by workers are largely in the past now.
Lim also said that lockdowns had shown people that a lot of business can be done online, the yearning for physical contact notwithstanding.
During this period, SGInnovate, which Lim says is a relatively small player in its domain, was able to take a long look at the evolving situation in Asia and its own role in the growing MedTech markets and investment sectors locally.
Half Public, Half Private
Lim reports to a board, half of whose members are private sector, the other half public sector. The organisation was created that way so as not to be bound by public sector strictures. “It makes us agile. We have a high degree of autonomy.” He added, “We are the standard bearers for the small but growing Deep Tech economy.”
The organisation comprises an investment fund, a talent and deployment platform, and a community platform. The community engages innovators via frequent events, which allow SGInnovate to invite startup candidates to opt into its database, direct them to the talent database, and then see how best to best match them with other companies.
The Achilles heel of the startup sector was always money and talent, said Lim. He sees SGInnovate’s job as simultaneously developing both. “This outreach raises awareness and allows people to come to us, as a committed Deep Tech investor.”
He continued, “Our role is to identify who is already engaged, and those corporate and health care partners that still need to be brought on board so that our startups can reach out to them.” SGInnovate also matches “mission-critical” labour with supply and demand. Its work is weighted to Singapore, but it has a global remit too.
Deep Tech – A USP
Deep Tech is defined by Lim as cutting-edge technologies that demand a high degree of specialisation by its originators as well as by practitioners. Deep Tech comes from deep science, and a lot of the local R&D resides in Singapore’s universities. The technologies typically come out of relatively fresh research, and ideally have unique IP that can be protected. To list a few examples: Nanyang Technological University is possibly the world leader in robotic endoscopy research; NUS is developing a non-PCR based method of nucleic acid amplification with a private company partner; and Duke-NUS has been making fast progress in the drug space.
SGInnovate is moving increasingly into the areas of “hardware and wetware” — drugs, diagnostics, advanced manufacturing and food and agriculture. The new direction is still at the early stages of investment planning, but “the consensus at board level is that this will happen,” said Lim.
“The government should step in if a gap has been left by the private sector,” he opined. When SGInnovate started in 2016, its focus was software-related themes, AI, quantum and blockchain, and subsequently, digital health and space tech. But in the time since, IT and software investors have stepped in, such that “we don’t need to be involved anymore,” said Lim.
At the start of the engagement process, the funding is all government-sourced, and the aim is to see if public-private partnerships can evolve. The foundations were good, said Lim, “but we need to work harder in our role of facilitating deployable technologies.”
A venture unit helps pre-company project teams at the universities that are working on frontier technologies to translate their work into initial prototype-able MVPs (minimum viable products). SGInnovate’s work is designed to help companies become “investable,” be it through its own fund or those of its partner VCs, Lim stressed.
It is working in an environment where COVID-19 has pushed a lot of non-pandemic diagnostics to one side. “There’s no question that people have pivoted towards solving this ‘grand challenge.’ So many have tried it, based on demand going increasingly higher, and are working on projects such as saliva-based and antigen-based tests.”
In one example, dentistry company Structo pivoted to applying its 3D printing expertise to make new generation nasopharyngeal swabs. Elsewhere, Biofourmis developed its analytics platform to target COVID-19, and Lucence, which was set up to specialise in cancer diagnosis, also did the pivot to the coronavirus.
“But at some point, we need to revert back to the business plan,” said Lim. “Investors won’t be infinitely patient and generous,” he cautioned. Robotics, 3D printing and digital mental health are prime examples of the project fields that will benefit from renewed attention once the pandemic is manageable on a global scale.
Telehealth got a massive boost under COVID, and its ongoing adoption has remained very high, said Lim, with more people looking to sign up to it. Telehealth has broken down several barriers, one being the often-nationalistic approaches to care delivery. Indonesia, for instance, represents a potentially very big health care market, but it remains largely closed off to clinic groups from Singapore. While Singapore’s big hospital groups, Raffles Medical Group and Parkway Hospitals Singapore, have had success in entering Vietnam and China, they have not seen the same results in ASEAN’s most populous country. But with telehealth, the market access barriers are being broken down.
Deep Tech’s Attraction
SGInnovate’s policy of “doing the stuff nobody else wants to do” means going into new risk areas. A lot of people say they want to do Deep Tech investments, Lim notes, adding that the investment community is not accustomed to doing high capex projects that require long term input and have a long route to liquidity.
Neither do they all have the capacity to do the due diligence, price a deal or syndicate investors. “That’s what we’ve been doing – opening the doors to other funds who can co-invest with us.” In fact, the organisation is even seeing interest in Deep Tech coming from the conservative world of private banking. The pandemic has crystalised interest in it. High net worth individuals seem to want to directly explore Deep Tech.
Next on SGInnovate’s priority list is to install investment terms to support its new areas of focus. It also wants to build vertical communities to be able to supply technical and product assistance, as well as regulatory advice, to companies requiring such help.
It also wants to internationalise and bring regional players into its group. Lim said, “We play an important role but there’s still a lot more we can do, including moving into drugs, where the hurdles will go up.”
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