GCV Analytics’ webinar, with a discussion panel on the life sciences sector in partnership with Faegre Drinker, showed the power of long-term thinking when it comes to corporate venturing.
The world’s largest healthcare firm, Johnson & Johnson, has invested more than $3bn through its Johnson & Johnson Innovation – JJDC unit since 2012, but the vitality of nearly 50 years of total investment experience means the model never remains static too long.
Asish Xavier, vice-president of venture investments for JJDC and global head of biotech investing, told the CVC-oriented panel on the life sciences sector yesterday that it was going through its regular five-to-seven year process of re-evaluating its process and strategy to maintain best practices under new president Chris Picariello.
These best practices are starting to include third-party capital, as evidenced by Jasper Bos, senior vice-president and managing director of M Ventures, Germany-based Merck Group’s €400m corporate venturing unit, and other panelists at the webinar moderated by Matt Stamski, partner at law firm Faegre Drinker.
Earlier in the month, Bos had shared at the first GCV Digital Forum the rationale behind the co-investment fund M Ventures has set up, explaining: “We see more opportunities than we can [possibly] invest in.”
Bos also added that corporates are particularly good at overcoming a knowledge gap when investing in nascent pharmaceutical enterprises. This was a particularly timely remark when the world is looking to the pharmaceutical industry in the Covid-19 crisis, and valuations in life sciences and digital health have been shooting up.
(Join our next GCV Digital Forum on 29 September when Bos’s boss, Stefan Oschmann, CEO of Merck, will be a keynote speaker.)
The capital looking to flow into the best managers makes sense but the returns available in healthcare are attracting newer entrants, encouraged by the outperformance of Alphabet’s GV corporate venturing unit among others over the past decade.
A decade ago and the healthcare industry was insular as its corporate venturing units co-invested with each other and targeted deals its own sector. The rise of GV (formerly Google Ventures) and others, such as Ping An and Tencent, has meant healthcare is opening up.
Bank Rakyat Indonesia (BRI)’s Indonesia-based corporate venture capital firm, BRI Ventures, set up an independent venture fund this week for startups outside the financial technology space, including healthcare.
The fund, Sembrani Nusantara, is targeting an Rp 300bn ($21m) first close from third-party limited partners. In addition to healthcare, the fund will target education, agriculture-maritime, retail and transportation technology.
Nicko Widjaja, CEO of BRI Ventures, which already manages $250m on behalf of Indonesia’s state-owned Bank BRI, the largest microfinance institution in the world, said: “We can see that the industry is shifting dramatically.”
Never a truer word spoken.