Curing the world’s ills

Edie Lush

Edie Lush says UK biotech and medical research is world-class, but that start-ups face a challenge to raise capital and must think global from the start

Medikidz doesn’t fall into the specific ‘medtech’ sector, but its experience is worth examining. Started by two New Zealand doctors, it has received £300,000 seed funding from angel investor Rob Hersov to develop a range of online (social networking, website and games) and offline products (books and pamphlets) that explain medical concepts to young people after they’ve been diagnosed with conditions that even their parents may find difficult to comprehend. Despite having no competitors and backing from respected doctors such as Professor Ricky Richardson, the founders have been trying to raise £1-2 million for more than a year and have found the going incredibly tough. They spoke to more than 50 venture companies and private investors, but only after scaling back their ambitions (they plan to launch in the UK, Australia and New Zealand first, then tackle the US), making more equity in their company available to investors and lowering the valuation, they’ve found a supportive funding source in David Giampaolo of private investment group Pi Capital. Giampaolo has offered Pi members the opportunity to invest. Of Medikidz, Giampaolo says: ‘It’s rare to find both a good business opportunity addressing a clear gap in the market and a good cause at the same time. Despite this being significantly below our usual target level for investment, I’m confident several members will be attracted to its unique proposition. Additionally, by getting involved in this way, we will be able to better track and monitor its progress in advance of further rounds of funding.’

So if you are an entrepreneur or research scientist with a brilliant medical innovation, the lessons are simple: think global – especially US – right from the start. The UK market just isn’t big enough or sophisticated enough. And seek out private capital that will stay with you for the long haul because for the time being, public capital markets are comatose and in intensive care.