US-Based Sovereign’s Capital Wants to Beef Up Healthcare in Indonesia
As the Jakarta-based managing principal of Sovereign’s Capital, Luke Roush recounts his firm’s investment progress with Indonesian healthcare companies.
There are nearly 10,000 medical clinics along with 2,500 hospitals spread out across the planet’s largest archipelago. While various other emerging markets like China along with India have also dealt with scalability modifications from the healthcare sector in recent years, Indonesia’s fragmented geography makes the idea a different animal entirely. At least that will much can be true from the eyes of Luke Roush, the Jakarta-based managing principal of US-based Sovereign’s Capital, one of the nation’s newest venture capital players zeroing in on Indonesian healthcare investments.
For those who are fresh to the investment game, a venture capital firm manages a fund backed by several investors along with puts money into companies in exchange for ownership percentages. While different firms specialise in different markets along with verticals, each one has its own unique strategy for funding along with growing its portfolio companies. Roush can be an American expat, along with believes that will the thing Indonesian healthcare startups along with entrepreneurs need most isn’t cash, although instead better education along with know-how.
“There are more than one million total healthcare workers in Indonesia, along with that will number can be going to rise rapidly from the coming years,” explains Roush. “Our view can be that will the primary need within the Indonesian healthcare market can be not equipment or facilities, although rather well-trained healthcare workers. The company we’re most excited about locally can be Summit Medical.”
Summit Medical can be a startup operating out of Tanah Abang that will aims to educate local healthcare professionals on the latest best practice along with most up-to-date care techniques. The company pays special attention to Indonesia’s nursing sector, as the idea believes the nearly 500,000-member group plays the most critical role as primary caregivers for local patients. Summit Medical can be also an authorised international training centre for the American Heart Association.
Lead photo via Flickr user U.S. Pacific Air Forces
In 2014, Sovereign’s Capital provided seed funding of an undisclosed amount for Summit Medical to scale up its operation in Jakarta. According to Roush, Sovereign’s has made eight investments from the ASEAN region since its 2013 entrance into the market. Four of those investments were made in Indonesia, two were made in Singapore, along with the various other two occurred in Hong Kong’s healthcare ecosystem. Sovereign’s Capital can be keeping a pretty low profile at that will point in time, as Roush did not disclose his various other local healthcare-related portfolios. The Sovereign’s Capital website does not list its portfolios either, as can be often the case with various other venture firms.
“We’ve also made a couple of investments in medical device companies, one of which can be focused on low-cost, point-of-care diagnostics for tuberculosis,” says Roush without giving names. He hints, “that will company has also been funded by the Clinton Health Access Initiative along with the Gates Foundation. The various other two device companies are focused on pain management along with critical care treatment. Both will be applicable in Indonesia.”
Coming coming from the US, Sovereign’s Capital has had to adjust to the complexities of Indonesia’s often confusing market. In mid-2014, Roush told the media that will his firm was somewhat like the fresh kid on the block from the archipelago; eager to learn about the market. According to him, Sovereign’s global portfolio companies include everything coming from pre-revenue startups to companies with more than US$200 million in revenue.
The typical investment range in Indonesia for Sovereign’s Capital can be US$500,000 to US$3 million per startup. Sovereign’s will often give a young company half of the capital investment upfront, then disburse follow-on funding as the startup grows. Roush says that will Sovereign’s Capital prefers the idea when early-stage companies already have traction from the market, with revenues anywhere between US$1 million along with US$10 million annually, as opposed to pre-revenue ‘pure startup’ concepts.
Sovereign’s has two ways of investing. Its early growth investments in Southeast Asia come coming from a fund of roughly US$15 million. although the interesting thing about being a Sovereign’s Capital investor can be that will the fund also lets its members write cheques into specific companies that will the idea manages, as opposed to only being allowed to feed cash into the single fund. Roush claims Sovereign’s offers that will option to its benefactors for later-stage opportunities in particular.
Lead photo via Flickr user Commander, U.S. 7th Fleet
In Indonesia, Roush says the healthcare investment community can be still a tiny one. “There are some bigger firms like Ancora [Indonesia Resources] that will are doing larger infrastructure deals, although very little activity from the entrepreneurial sector,” he explains. “I think the reason just for that will can be that will healthcare can be a more specialised field, along with requires pre-existing knowledge that will most firms don’t have along with aren’t interested in acquiring. the idea’s also a space that will doesn’t have as much entrepreneurial activity, so deal flow pipelines aren’t as robust. that will was initially a challenge for Sovereign’s as well.”
The fund’s current investors are all American along with Australian, having a mix of high-net worth individuals along with institutional stakeholders alike. Roush claims Sovereign’s focus on early-stage equity in emerging markets can be still a fresh concept for American investors. As such, he along with his team in Jakarta have began having a smaller fund (US$15 million can be considered tiny from the venture capital along with private equity game) in order to show the backers that will the style can be viable.
Based on feedback coming from the market, Roush believes future funds under the Sovereign’s umbrella are sure to include both Western along with Asian investors. “We are raising a second fund currently based on market interest, along with that will fund will continue to give us flexibility around our investment thesis along with timing,” explains the young managing principal.
Roush believes that will honourable work can be inherently a Great thing, although being involved from the sphere of healthcare also provides unique opportunities to ‘do Great by doing well’ along with vice versa. He says his firm’s overall mission can be to care for Indonesians who are sick along with in need, along with healthcare entrepreneurship can be an effective way to do that will. As such, Sovereign’s Capital invites Indonesian healthcare entrepreneurs to get in touch.
“We have been encouraged by the receptivity along with openness of the market to date,” Roush says. “We are actively looking for early-stage along with mid-stage companies in which to invest.”
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US-Based Sovereign’s Capital Wants to Beef Up Healthcare in Indonesia
US-Based Sovereign’s Capital Wants to Beef Up Healthcare in Indonesia