US-based serial technology entrepreneur and angel investor Sunil Wadhwani has set up India’s first healthcare-focused Venture Studio, to create and launch 20 to 25 digital health service companies in the next five years. The plan is to nurture each of these companies to see them generate about $100 million in revenues within five to seven years of operation.

The first three companies, focusing on areas like obesity, chronic pain and contraception, are in the launch stage. Wadhwani’s attempts to create new companies in the digital healthcare space supplement his efforts to invest in Indian startups through his dedicated healthcare venture fund W Health Ventures launched about two years ago.

“We have got three companies that are in the launch stages right now, one of them is in the field of obesity management, which is becoming a major issue in India, another is in the field of pain management, as 200 million Indians suffer from debilitating pain, and there is virtually no place you can go for an integrated approach to pain management that combines medication, lifestyle coaching with physical therapy. Contraception is another area. We will be disclosing the names of these companies in a few weeks. The process of recruiting the CEOs who will drive these companies is on”, Wadhwani says.

The obesity management company, like others, will be the first of its kind in India. “It will offer an integrated approach towards obesity management, which includes a medical approach but combined with coaching on other lifestyle factors. The integrated approach includes medicine, nutrition, exercise, therapy."

Venture Studio has a team of 20 experts who are engaged in identifying the most potential areas where new companies can serve unmet healthcare needs. “We identify the areas, our team does that, and then we do a search to see who is going to be the best CEO of this entity. We offer them equity, and compensation. Typically, these people would be experienced entrepreneurs, who have done one of two startups themselves. They should know the space, should have the knowledge and a very high level of motivation and drive. Our goal is that by doing so we should impact over 100 million Indians, improving their healthcare through these companies. The impact is as important as building new companies and generating good returns”, Wadhwani says.

While the companies created through the venture studio will be based in India, its market can be global.

According to Wadhwani, his venture initiatives pursue a dual approach. “One is a venture fund, where you fund companies started by others, and the other is a venture studio, where we create and launch our own companies and then hire the leadership teams to drive them forward. We are only interested in healthcare delivery services innovation. And all in specialized areas like the management of diabetes, chronic care, pain, etc. And we look for people who have disruptive models of providing healthcare”, he says.

W Health Ventures claims to be getting over 100 business plans a month. So far, the venture capital fund has invested in eight companies. “The size of the investment is typically in the $2 million to $3 million in each company. We come in very early, at the seed stage, series A stage, while most VC firms come in later. And then it’s not just the money. We help entrepreneurs with product development, growth marketing, putting together high-quality boards, bringing other investors in later rounds of capital, etc. One of the companies we funded in the diabetes management space, BeatO, is one of the fastest-growing healthcare companies in India. Similarly, we have funded a mental health managed company called Wysa, which has developed an AI-based chatbot with which you can communicate. They have over four million users from over 65 countries in just a two to three-year period”, Wadhwani says.

Wadhwani founded and led iGate Corp, an IT services firm, which grew to 34,000 employees, over $1.2 billion in revenue, and was sold for $4.5 billion in 2015. He also founded and led Mastech Digital, an NYSE-listed digital transformation and IT services company with $200 million in annual revenues.

“In addition to building my own companies, I have also been a very active angel investor. In the last 20 years, I must have funded 45-50 companies in the US and India. Several of them are now successful billion-dollar organizations. So that also gives you an experience of what to look for, what kind of entrepreneurs to back”, Wadhwani adds.

Venture Studio for Chronic Pain

Mastech founder sets up India's first Venture Studio in healthcare