Accelerating the medical tech space

Siraj Dhanani is very excited about his venture. This 42-year-old pharmacist by training, who went on to do a Master’s in Pharmaceutical Marketing and Healthcare in the US, has kicked off his accelerator – InnAccel Consulting Services – in the medical technology space.

He is hunting for space to house his accelerator – to incubate and grow start-ups – in Bangalore.

The constant bustle of people moving about at a trendy café in Bangalore’s hip UB City does not deter him as he gets into the details of his venture.

“While our accelerator will have mentoring, strategic guidance and all of that, we are much more hands on in that we will be supporting the design, engineering and clinical validation of the product. Our goal is that somebody comes in with an idea, they go out with a regulatory compliant, well-engineered product,” he says.

He worked in the pharmaceutical industry in the US and got a part-time MBA, after which he switched to investment banking on Wall Street, again working for small pharma and biotech companies.

He returned to India in 2002 and worked with a lifesciences company before starting a business analytics and consulting firm focussed on the pharmaceutical industry. This venture got sold to a global pharmaceutical data provider, after which he started working on his current venture from mid-2012.

InnAccel stands for Innovation Accelerated. And, that is what Siraj hopes his venture will do.

InnAccel, according to him, will focus on start-ups that are into medical devices, diagnostics and prosthetics. He plans to have six companies in the accelerator by March.

Right now, he says, InnAccel is working with two start-ups – in fact, the companies haven’t yet been formed – that are studying the needs.

It has tied up with St John’s Hospital in Bangalore and one of the teams spent about two weeks in the hospital’s emergency and trauma care department, even riding ambulances, to learn the needs. It is working on two products that it has identified in trauma and emergency care.

According to Siraj, the acceleration process that InnAccel has in mind is two-three years long. It depends on the start-ups and their ideas.

The in-house team of experts will help start-ups finalise the product, design and incubate the venture, including helping it get seed funding, before it is ready with a regulatory compliant product.

“Our revenue model is based on the success of these companies. Once they graduate, we will have an upside which is linked to their success.

“Our model will be completely based on whether we get the companies to a successful product and then on to Series A funding and licensing,” explains Siraj.

Siraj and his team got trained at a few leading incubators in the US, where, he estimates, over a 1,000 med tech companies come out every year. After the US, Israel is the next hot destination for med tech companies and all these start-ups develop and build products for the global market, particularly the US, he says.

India today, according to Siraj, is where the US was in med tech in the 1950s and 1960s, when the first engineering companies decided to enter this space.

With India so far behind in med tech, will it not be a sort of re-inventing the wheel? Not at all, argues Siraj. The research or innovation is not over core technology. He cites the example of developments in television sets. “There are people coming out with TV models every year. Now that is also re-hashing the same thing, right?” These are all attempts to make a product or a technology fit a certain market, he emphasises. One of the key ways to make that happen is in price management.

In the West, the Government and insurance companies take care of healthcare. Hence, there is no real need to engineer the product for a lower price. This is not the case in India, where a majority of the people cannot afford either the equipment or the diagnostic services. Products designed and built in the West do not necessarily fit the local requirements. “There are two aspects. One is cost engineering and the other is making it appropriate it for a market,” Siraj says.

If any product can be engineered for the Indian market, the world will become a market. “There is a market for a five thousand rupee stent, right,” he says and adds that there is no ecosystem that is doing the R&D for that. This is what InnAccel hopes to spur.

The two teams that are working with InnAccel have engineering background. One of them is a mechanical engineer, who has studied at Stanford and worked in the US. He has been to villages in Chhattisgarh to see neo-natal healthcare facilities. He is working on a continuous temperature monitoring device for low birth-weight infants, another typical developing country problem. He says InnAccel will have to raise funds from investors to spread the network of accelerators to at least half a dozen cities.

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