RamaOnHealthcare July 13, 2022
Welcome to RamaonHealthcare. This is about the New Zealand Entrepreneurial healthcare system through the lens of seed investors.
Mohan Nair, CEO of Emerge Inc.
Caroline Quay and Dr Ken Chin of Caramed Capital
Mohan: We all lack the time to listen to ourselves for more than 7 minutes. So why not limit ourselves to such in an interview. Today I have as guests two strategic seed venture investors, Caroline Quay and Dr Ken Chin of Caramed Capital based in New Zealand. Caramed is a specialised healthcare focused venture fund in New Zealand.
As chance would have it, I have spent three full days working with and observing the team at work in investment thesis analysis, deal flow interviews and discovery and, frankly overeating home made muffins.
This interview is conducted from the beautiful New Zealand backdrop and with entrepreneurship and venturing in the forefront of this conversation.
Mohan: Welcome to you both. Let’s get right to the heart of the issue. Ken is a practicing physician for decades in New Zealand while Caroline you have built enterprise level companies and took one public, as well as been an investor to start ups in healthcare. Why your interest in healthcare?
Caramed: Healthcare innovations solve health problems that change lives and benefit society. Enabling, improving and advancing health and well-being through innovative health technologies improve the lives of individuals, Whānau (families), communities and society.
If the current pandemic has taught us anything, it is the critical need for investment in healthcare technologies to find ways to accelerate time to market for solutions in healthcare.
As you would have observed in your time with us in New Zealand, we have world class innovation, medical research and scientific discoveries in healthcare, innovative thinking, entrepreneurial mindsets, and a desire to achieve societal benefit. These are all ingredients to create sustainable high growth healthtech businesses.
Mohan: New Zealand’s healthcare sector is growing but limited in size. Start-ups want to grow and so many want to enter the US. What are your views about the growth expectations placed on entrepreneurs and what is missing in the ecosystem in New Zealand?
Caramed: Our small population and geographical isolation has birthed creativity, innovation, a “can do” spirit, and entrepreneurial mindsets. NZ start ups understand the need to be thinking globally right from the start due to our small domestic market.
NZ start ups understand the need to be thinking globally right from the start due to our small domestic market.
Like the rest of the world, our current biggest challenge is talent. In healthtech, this challenge is amplified due to the requirement for specialised healthcare sector specific expertise. Specifically, we are in need of more specialised healthcare research translation, commercialisation expertise, and sector specific execution and operational skills. As our focus is to build global companies from the outset, global connections in the healthcare industry and access to a larger capital pool of healthtech investors globally are also important.
We are starting to see some of these challenges/gaps being addressed. A very good example is how very fortunate we are Mohan to have highly skilled and experienced experts like you, willingly and generously sharing your skills, experience and connections to serve our ecosystem and companies here in Aotearoa New Zealand.
Mohan: I know you are raising a fund to cover a part of this ecosystem. What do you believe is your unique contributive asset to the mix?
Caramed: CaraMed is unique as we are founded by an experienced, highly specialised team of successful healthtech entrepreneurs and investors with a track record of success in investment and execution.
CaraMed is unique as we are founded by an experienced, highly specialised team of successful healthtech entrepreneurs and investors with a track record of success in investment and execution.
Our experience investing in emerging healthtech companies over the last 15 years (across two funds) has earned us the reputation in the NZ investment ecosystem as “value add” expert healthtech investors that bring specialist expertise to unlock value and potential. Consequently, we have a high quality pipeline of investment opportunities.
Mohan: New Zealand’s goals seems to be to bring about global change from local roots. What do you think makes New Zealand uniquely positioned to enable healthcare transformation to the world?
Caramed: New Zealand has world class innovation, medical research and scientific discoveries in healthcare. We are a nation of people who think differently. We challenge conventional wisdom and prevailing thinking to chart our own pathway. These unique cultural attributes birth innovative thinking, entrepreneurship and a global focus from the outset, which sets us up to bring global transformation.
Our geographical isolation and small size as a nation has forced us to think differently, challenge prevailing thinking, be resourceful, inquisitive, courageous and quick in thinking to create new unchartered pathways for the collective well-being of our people. This has produced a nation of problem solvers who are creative, innovative and have a global mindset.
Our geographical isolation and small size as a nation has forced us to think differently….
This culture is embodied in what the Māori people of New Zealand call the Pōtiki spirit. Pōtiki in Māori means the youngest child, the cheeky one, the smart one and the one who has no limitations. The most famous in Māori mythology is Māui Pōtiki who, according to legend, snuck aboard his brothers fishing canoe and fished up the North Island of New Zealand, Te Waka a Māui (translated as the fish of Māui). He was quick, curious, intelligent, resourceful, cunning and thought “outside the box”. These attributes are embedded in our culture and our people.
Mohan: In the last three days together, I have participated and observed your working style with emerging company leaders who pitch to you. You are a great team with a unique recipe. But really observable is how little you really talk about you and your fund. It’s all about the narrative that the entrepreneur brings and during debrief, we spend the time to deconstruct the motivations and the contributive value of the company. Tell me more about this approach.
Caramed: At the heart of this are the founders and founding teams. It is critical for us that founders and their teams are coachable, open, have the ability to grow, are resilient and have integrity. We have in the past walked away from funding exciting novel technologies where these attributes are lacking. Ultimately, it is about alignment of values and purpose which will create an effective and successful long term partnership between CaraMed and our investee companies.
Mohan: As you look at the seed investing market in New Zealand, characterize this for us in the USA.
Caramed: New Zealand start-ups are innovative, nimble, resourceful and resilient. Our resourcefulness means that we do a lot with very little. You will find that the “burn rate” of NZ companies are less aggressive than companies in the USA. This also means that NZ start-ups are good value. In recent times, we have seen overseas funds from Australia, Asia and the USA enter NZ’s market looking for good quality companies at good valuations.
New Zealand start-ups are innovative, nimble, resourceful and resilient. Our resourcefulness means that we do a lot with very little.
Seed investing in New Zealand is not just about serving capital but also serving our community and society. We have a healthy and vibrant early stage investing ecosystem. This includes a very active angel investment community that are committed to investing their time, skill and funds into companies solving big problems that improve and impact our community and the world.
Mohan: What are the key requirements for you to fund a start-up in healthcare in New Zealand? Do you find it all or do you have to work with the teams to bring these to the forefront?
Caramed: Our key criteria include high quality science, discovery or technology, unmet clinical need, impact, unique intellectual property or other defensive characteristics, platform technology (i.e. potential for multiple applications/indications), exceptional founders and teams and an exit pathway that is clear and realistic.
Given the specialised nature of healthtech investments and some of the challenges we face (described above), we work the teams to bring these to the forefront.
Mohan: Caroline and Ken, I have had the joy of watching you build your fund and observed your process to bring your investment thesis to life. I enjoy it. As an Edmund Hillary Investor Fellow, I am always focused on the ecosystem within Aotearoa New Zealand that brings about global transformation from the shores of this strong nation. Thank you for being an eager partner in this goal.
About Dr. Ken Chin
Dr. Ken Chin is a co-founder and General Partner of CaraMed Capital. He is a medical doctor with over 20 years experience. His family physician practice was recently acquired by a digital healthcare provider. Dr Chin is a successful health tech investor. He provides clinical and business insight in the assessment of early stage healthcare investments, as well as strategic advice to healthcare businesses. He lives in Auckland, New Zealand.
About Caroline Quay
Caroline Quay is co-founder and Managing Partner of CaraMed Capital, a specialised deep healthtech venture fund in NZ. Caroline is an experienced healthtech investor and healthcare industry executive. Her experience covers strategic development, commercialisation and investments in the healthcare and biotech sectors. Caroline has led investments into an impressive portfolio of innovative healthtech companies in NZ covering medical devices, digital health, drug/biologic product development and diagnostics. She is recognised in the NZ investment ecosystem for her successful healthtech investment and execution track record, and her unique “value add” to NZ healthtech founders.
About Mohan Nair
Mohan Nair is CEO of Emerge Inc, all about innovation and transformation. He is a 3-time corporate executive, 3-time emerging business executive with 2 exits. 10-year Innovation Officer and 3-time author. He is a sought-after keynote speaker and moderator. He is an Sir Edmund Hillary Fellow for Aotearoa New Zealand, Innovator-in-residence to MOVAC capital and advisor to Caramed. Mohan continues to bring the greatness of others to his audience who follows his narrative at Mohannair.com, forbes.com, innolead.com or https://linkedin.com/in/mohanemerge