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Toro Finserve to Launch $500 Healthcare Realty Fund


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India Healthcare Opportunities Fund's coverage in Business Standard

Published in: Economy & Finance
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Toro Finserve to Launch $500 Healthcare Realty Fund

  1. 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 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 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 2012-15 to $63 billion. ...................................................................,.,...............................................................................~.............................. -+-