E547 | Tanuja Rajah, M Venture Partners (MVP): From PhD to VC: Tanuja Rajah on Cracking Southeast Asia’s Health Tech Boom

0:00Welcome to the second episode of our SEAVC podcast series, where we immerse ourselves in the South and Southeast Asia venture landscapes and explore venture strategies with co-hosting co-hosting. from Circle Capital. Today we're joined by Dr. Tanuja Raja, a PhD immunologist turned VC partner at MVP Venture Partners, who discovered something surprising about what it takes to win in Asian markets. The market that you're playing in matters just as much than the tea. We've seen great tea being wiped out simply because they were playing in Iraq, Adidas. Operating across the region, home to 25 % of the world's population, Tanuja learned that picking great founders isn't enough.

0:39One of the biggest learning was just how important ownership matters to make venture math work. You can't just rely on picking the winners. Her portfolio reveals how successful funds navigate these markets differently. PhD is layering AI on top of years and years of real patient data. All of this to build sort of like a 24-7 healthcare concierge. From healthcare marketplaces to exit strategies designed for emerging fund realities. We see the bulk of those M &As happening within the$30 to$100 million range. And so you kind of like reverse engineer that and say, where do I need to enter in order for those kind of exits to make sense for them?

1:18So how do you separate yourself from the noise in the world's most competitive venture landscape? Really thinking deeply about the strategy. How are you going to separate yourself from the noise in order to get access to the best teams? In markets where even great teams can fail, Dr. Tanuja Raja shows what it really takes to win. Find the full conversation only on the EUVC podcast.

2:02This show is not investment advice and the hosts of this episode may be invested in the funds and companies featured. Welcome back to the UBC podcast where we champion and connect European venture. Whether investing, fundraising or building the next breakout firm, these are the conversations that move venture forward. Today though, we're shifting our focus a bit to the east to deep dive into one of the most dynamic venture ecosystems in the globe. For that, we've got our special co-host Ambika from Circle Capital. Ambika, thank you for joining me today. Thanks for having me back, David. I'm super excited to be here with both of you today.

2:36For those of you joining us for the first time, you know, on this South and Southeast Asia take, I look at early stage investments across the region from my lunch point here in Singapore. And I'm really excited because today we're joined by Tanuja Raja, who's a partner with M Venture Partners, also based here in Singapore. But Tanuja is not your average VC. She studied medical biosciences and graduated with a PhD in immunology. Very excited to hear her take on the world of investing. And I'm going to turn this right over to you, Dr. Raja. Tell us a little bit about your background and what got you into venture capital.

3:17Gosh, it's so funny to hear you say, Dr. Raja. My dad has this joke. He says, oh yeah, she's a doctor, but if you're sick, she can't really help you. But I'm Vika David. So nice to be here. Thanks for having me on. Just maybe a very quick one on M-Venture Partners before I dive into how I got here. MVP, or as we like to call it, is an early stage fund that's domiciled in Singapore. But we've been investing across Southeast Asia and India since 2020. We're currently on our third fund and we like to back founders pretty much at day zero. Sometimes negative one as well because all they have is a deck and a team.

3:56And yeah, working with them across that zero to one, one to ten journey. myself and how I got to VC. Look, when I was growing up, there wasn't this ecosystem in Southeast Asia. There was no such role as being a venture capitalist, right? And so I went off to university to study science, which is what I love to do. Love to uncover new information, love digging around and exploring, you know, having an inquisitive mind. But while I was writing my thesis, I decided that I should start a startup. I think I was bitten by that bug while I was in Australia. I saw some tech companies coming out there.

4:35And when I returned to Malaysia, I thought, and Malaysia is home for me, by the way, I thought, let me just give this a shot. I knew nothing about building a company, like literally zero. I didn't know how to set up a website. I didn't know how to enable payments online. And this was back in 2009, like 2010. 10. But I did anyway, learned a lot. And that was kind of my foray into this world. Needless to say, I made every mistake in the book. But I also learned a lot like raising capital, building a team, expanding the business from Malaysia to Singapore, and all of that stuff. So yeah, that was my intro into this world.

5:12And I haven't looked back. Tanuja, most people with your academic background that I know, at least who are in venture are doing like life science focused investing, like heavy biotech, drug dev stuff, right? It's not really what you're doing as a firm, but also as an individual. Could you share a bit about your thinking around exciting vertical spaces, like with your background in immunology, that's super niche, right? How does that translate to the type of investments and companies that you're excited about backing today? No, David, don't get me wrong. I love that, you know, deep tech stuff, I do think, however, that in markets like India and Southeast Asia, many of the biggest challenges aren't necessarily about new drugs.

5:55It's about access, building trust and affordability. And so that's where we like to focus. We don't take any science risk at MVP, but we do back healthcare companies, those that are trying to solve the problems that I just mentioned. So it could be data ops, logistics problems within healthcare. It could be a consumer experience problem as well. How do you create a 10-star experience for the patients? How do we build trust in this ecosystem overall? So that's kind of what we've been focusing on. I guess as a supplement to that I also just feel like it makes more sense in terms of fun timelines here so anything that requires clinical trials FDA regulatory approvals etc.

6:39just generally takes a lot longer and so it's something that we've decided not to focus on and just for the listeners just to double click on it to just focus in terms of geo we're talking about Indian Southeast Asia so it's a bit different from our typical kind of Content is more focused on Europe, but this is also part of why we want to do these episodes to share these differences and contrast these regions. I was very tempted to ask follow-up questions. I'm there. Go ahead. Go ahead. Well, this is the question, but just more of a take on what David was telling us that this is India and Southeast Asia.

7:16I thought perhaps it might be interesting to pick on that consumer angle and set the context here. Because the consumer numbers in this part of the world are insane. I mean, do you want to talk a little bit about why that is so important for your thesis here? Southeast Asia and India is home to 25 % of the world's population. You know, I mean, just that in itself is mind-blowing. Both these regions are kind of entering this golden age of rising affluence as well in terms of consumerism and booking for better products and better services. You've got young population. You've got a population that's now engaged on the internet.

7:56Particularly in India, we see the country undergoing this fundamental shift in income and consumption patterns. GDP per capita in 2022 was about$2 ,300 or so less. It's expected to hit$4 ,000 by 2030. I mean, that's insane. And people are more educated. They're wanting better things. They're wanting better products for themselves. They want to eat healthier. They want to live longer. They want to have access to everything that they see outside of Southeast Asia and India. And that's where we feel we can come in and really enable these tech companies to exist and serve. I think that's super interesting just to set some of the context.

8:35So, yeah. Before we deep dive into healthcare in Southeast Asia and India, I wanted to ask you something I ask every single guest, which is your biggest learnings in venture. I think it's very interesting, particularly given your background. I think we've probably interviewed, I don't know, 400, 500 VCs, generally speaking, right? And probably if those five had your background. So that's a very, very short amount. Academic background, I mean here. So what have been your biggest learnings in venture as someone coming from more academic kind of lab backgrounds into this weird world of venture, as you said?

9:10You learned it all by making all the mistakes. And I feel like my answer is going to be super basic. So for someone that comes from an investing background, they're probably going to hear this and go like, yeah, well, obviously. But because I didn't come from that background, I think for me, one of the biggest learning was just how important ownership matters to make venture math work. And I know everybody talks about it, but, you know, really making that call to strategy was important for us. You can't just rely on picking the winners. You have to ensure you've got meaningful stakes in them. And it's very hard to put into practice, like extremely difficult when you're an emerging fund manager that has limited brand power.

9:52You know, we definitely didn't always get strong ownership in some of these exceptional founders building great companies. We decided in the first fund to do it anyway. And we had to fight our way into those rounds that were being led by these bigger brand name firms. And in the process, found ourselves owning a very tiny piece of a really, really amazing company. We did that because we wanted to demonstrate that we had access to these exceptional founders. As our brand has become better known and we have a bit more reputation and credibility in the market now, we've kind of steadily increased our ownership in our investments.

10:32And so today, whenever we go into rounds, we kind of ensure that we have that minimum stake that we're gunning for. Can I ask you to kind of just expand a bit more on that? Because I think you said two interesting things. One is like how that learning affected, basically, let's call it fund modeling in a way, right? Because fund size is strategy, you need to model that blah, blah, and ownership plays a big role. So you shared that. But you also shared something that I also thought was really insightful, especially considering that the biggest chunk of our market is emerging managers, right? which you made the decision as a firm where we're going to showcase access and we're willing if that means sacrificing the ideal ownership stake in the early days you know that's kind of the strategy can you share a bit more light on on the process they are going from first fund you're now in third fund if i recall correctly just share some insights there how was it internally for also our listeners to kind of extract some some learnings i do yeah i mean it was it was kind of a debate internally whether we wanted to do this.

11:32And by this, I mean, have a smaller piece of a really amazing company in fund one, when we knew we wanted much, much more. You know, some people around the table said, no, we shouldn't do that. That's going to potentially mess up, you know, how much math works for the fund. And then some people around the table were going, well, no, we want to showcase we have access to these founders, that we actually could get into these hotly contested rounds. I mean, some of these rounds were being led by these marquee names, right? And who are we? We're just like year one, no portfolio, like nothing really to shout about.

12:09So we had to convince the founders to accept our money. We had to showcase that we could bring value to the table, even though we were the tiny fund with no brand name. And now with a larger fund, we're able to do more. We support them, not just with our network and expertise, advice, et cetera, et cetera, but also with more capital, which has made it much easier for us to get to the ownership stakes that we've set our sights on. Do you think to that effect that there's a lot less, there's fewer VT here, like it's a less crowded space than Europe is. So do you think that makes a difference in being an emerging fund manager here in this particular environment as well?

12:46Okay, I can't compare whether there are fewer emerging managers here compared to Europe. But I think there are a lot of emerging fund managers here and a lot in India. There's so, so, so many micro PCs as well, all playing at that early stage kind of space. And so you're not just fighting with some of the larger funds that have raised tons of money that are now saying, okay, I'll come a little down, make a few puns here and there, and then put a couple of million as these companies scale. So they've also entered into that early stage arena. but you've got micro funds, you've got angel investors, you've got family offices, and they're all playing in the same space that we are operating in.

13:26So being able to show that you can really value add when we had no brand name and nothing to go on was difficult, honestly speaking. It's much easier for us now. Yeah, there's an enormous number of angel investment groups that have popped up in this part of the world. I'll sort of just, you know, as an aside, And I think compared to Europe and the US, there's probably more groups here than I've seen anywhere else in the world, which I think is a fascinating direction that venture capital is actually taking. There's also been a lot of unicorn companies that have bloomed, especially in that 21, 22 height, right?

14:04And so a lot of those founders now are active angel investors themselves and giving back, which I think is great. but they are also now this new group of people that are actively investing in the early stage space. Does the region have, let's not call it unicorns because I think that's sometimes not the right way to think about it, like big tech successes within this healthcare space already or not yet? I would argue there are few, but there's far and few between. There's not enough. and some of the more successful companies have actually had to, and here I'm talking about real biotech, medtech companies, have had to actually move outside of Southeast Asia and start operating in the US, in Australia, in Canada, and raising the bulk of their money from places abroad as well.

15:00There isn't up until very recently been a very strong deep tech investment community in Southeast Asia and India. That's definitely changing now. There are far more funds that are investing in realty tech companies. The government is doing a lot as well. The government of Singapore is doing a lot to kind of this space. But I think, you know, just rewind a couple of years ago, there was an opportunity for these companies to raise the capital they needed to grow. And so they moved elsewhere to find the capital. What about more broadly? So health tech, digital health, telemedicine, you know, kind of this more broad definition of health.

15:38So that I think we've had some successes for sure, but still, again, not a lot. And I think this is my personal point of view. Obviously, I'm sure there's some healthcare investors that are going to disagree. I don't think healthcare can exist in the online sphere alone in Southeast Asia and India. By that I mean, I don't think that you can just be a pure digital health player. I think at some point you have to go offline. It's got to be that physical digital combination. And the reason why I say that is because I think at some point you need the physical presence to build trust with patients.

16:18So online can be a great way to get more eyeballs. customer acquisition initially, right? You hook them online and then you kind of, it's not enough to sustain and not enough for you to build a big company. I was going to say, I think we've seen a pattern in some of the types of health tech investments that we've previously seen. So there, I think there was initially a big group of sort of telemedicine, you know, investment were doing particularly well. How do you envision this change? Because I know we talked a little before about AI, you know, now plugging in. And how does that start changing the landscape a little bit as well in the way you see, you know, making these investments and the kind of things you're looking at?

17:02And how I view AI and healthcare or how I view this kind of online offline? And how you view perhaps the next wave of investments. So we've been looking at, you know, we've sort of seen a lot of great, wildly funded telemedicine startups, for instance, in the last, I'd say in the last five years, especially. Now, I think that wave is petering down. And with this explosion of AI, do you think that there is a different theme coming up to some of the investments that you're seeing? Or do you feel that AI plugs into general investments right across the space? I don't know. I'm just throwing this out here just to get your take on how you see that.

17:39No, I mean, within the healthcare space, I mean, obviously, I see AI obviously playing into all spectrums. So to talk about like, you know, we've seen companies that are using obviously AI, everything from drug discovery to even using AI for nutrition, like that whole gamut, right? I think we're just going to see more and more of that. and obviously AI medical scribes and like there's just so many companies out there. We aren't yet though making that, when I say we MVP, struggles to make these kinds of investments because I struggle to find the differentiation amongst most of the companies that we're seeing.

18:20So there are dozen medical scribes. When I speak to drug discovery companies, albeit they're far fewer than everything else that we are looking at. again like you know how proprietary is their data um how do they compare to some of the incumbents that are playing in this space as well i think that's one of the interesting things when i look at ai and something that we always keep at the back of them our minds right unlike some of the technologies that have come before the internet uh you know uh cloud like these all offered like new distribution channels for companies, right? You go to market strategies for companies.

19:01AI is slightly different. And to a certain extent, I think like incumbents might have a little bit of an edge. And, you know, we're always thinking like, okay, this is a wrapper, is this a shallow wrapper? Will the next iterations model be able to do what this company is doing today, therefore making it obsolete? And so we just have to be so, so, so mindful when we're looking at an AI company, Like really, what are they bringing to the table? That's weak, is something that we keep. And it makes it very hard for us to pull the trigger on making investments. Though I know it's all the rage, right?

19:36But I guess also, you know, in the region, given we just talked before, like the consumer angle here, right? Such a big opportunity, right? Even within healthcare, right? Is that also a reason why initially when I asked you about biotech, deep tech, drug dev, you're kind of well it's not really our focus is that part of the of the rationale behind it and does this mean that that the easy pickings inverted commas there right that the easy pickings are actually more on the consumer side within healthcare and health tech and digital health and blah blah yes and no um so there are pros and cons to investing in both both these types of companies right consumer companies again like can anyone else be building this really what's what's setting you apart when it comes to more and so distribution it's just real operation like hustle right to get this product out there and to be the best when it comes to more deep tech healthcare investing we always ask ourselves again like is this tech new uh and how quickly is this new tech developing so that you know someone else can just come and say i've got a better version of what they're doing right like how quickly will they be i guess replaced by by new technology and model.

20:51And so I think that's the challenge with investing in both, right? What we are seeing is I can give you an example from the portfolio, right? Like, we have a company in Thailand called HD, which is a healthcare market. It started up as a healthcare marketplace doing something fairly simple, which is connecting patients in Thailand and Indonesia with clinics and hospitals for elective procedures, diagnostics and op care, right? You can think of it as like a one-stop platform for comparing prices. You can book and schedule your surgery, stay surgery, things like LASIK, in-even-access financing. And they were really primarily solving the issue of trust.

21:33Where do I get the best treatments from the best doctor at the best price? But they've now evolved into so much more with AI. So HD is layering AI on top of this regionally trusted platform using years and years of real patients' data, so conversations that they've had with nurses before, before making a booking, finding out about X, Y, and Z procedures, transaction data. They've used all of this to build sort of like a chatbot that acts like a 24-7 healthcare concierge. And this AI can now handle everything from basic medical queries to scheduling, price estimates, et cetera, right? They're using this in-house now, but the idea isn't to keep it in-house.

22:16The idea is to productize this, offer it as a tool to hospitals and clinics. It's a smart wedge, right? Because this started as a consumer marketplace as something you invest in and are now building this defensible vertical AI layer that generic LLMs can't easily replicate because of all the data that they have in-house. Actually, what would be really interesting here, for me especially, I don't know if, David, you might also be able to help tie the dots on some of this, but does Europe have, Do you feel that Europe and Asia have a lot of similar types of startups in this particular space? I mean, Tanuja, do you see a lot of these businesses being able to scale into Europe?

22:54And David, do you, by virtue of that, see a lot of them being able to enter that market? I'm happy to take it first. So my background, I don't do VC investing anymore. My background was more on the biotech actually side. So that's where I started. And so the playbook is quite simple. right it's and tenuja kind of hinted to it in the beginning it's really about that regulatory pathway right we have great science in europe um depends which country you are you might argue your country is best doesn't really matter you have great science you have great talent and then typically when we market things we have to go into the u.s the story behind the covid vaccine right european kind of founders but you know it was really launched in the u.s so on the biotech side that's really the path that I see.

23:37And there's, of course, exceptions. I also, on the tech bio scene, it's not my area of expertise, but some of the companies I know the closest have been very successful in that US transition. And that's really what's given them the status. So that's kind of what I see. But I think my blind spot is probably more this digital health kind of space side in Europe, which is not really something I understand in detail. Again, it would depend. So So a company like HD, which is using very localized data sets, would find it difficult to enter any other country. They would almost have to build that from scratch.

24:13You have other digital health companies, however, another one from our portfolio that's building a digital twin for diabetes. that is something that can easily be translated or taken over to other markets very easy because the AI model just works on the data that's fed into it from patient data, right? So whoever is using the data, you have a CGM, et cetera, et cetera. It works on that for two or three weeks and then basically the digital twin works. So it really depends. So it's quite interesting, I think, just, you know, just how we can leverage some of the cross-border transactionality of some of these businesses.

24:52So it's a conversation, I think, that we would return to once we see more evolving in the AI space, especially, I think. I wanted to ask you, Tanuja, you mentioned, you know, the portfolio example, kind of a B2C focus play and now shifting to more B2B. It's quite interesting. Would you venture say that's kind of the playbook for the region because of the volume of the consumer? Or is it also a maturity thing of the ecosystem? I think we see a lot of companies start out B2C. It's just much faster for them to scale and get that revenue growing. It's super, super long sales cycles when it comes to B2B.

25:32And it's very relationship-based. So the person that you're speaking to in the company leaves that role. You start from day zero all over again. You know, you've got these like additional complexities of doing business here. But I think we're seeing more and more of that. Like as in we see more of the companies that might have started off with B2C and now also doing B2B or B2B. Definitely. I mean, it is the most stable income route, right, for them. What's the follow-on capital that you're seeing on your companies? Is it U.S.? Is it European? Is it Asian? Where's the follow-on capital coming? Because you're early stage, as you said.

26:12Most follow-on capital is coming from within Southeast Asia and India. So, you know, the later stage funds that are here, the series 80 funds are investing into our companies. We saw a little bit of activity from the U.S. in 21, but, you know, that was the hype, right? And they've now kind of exited. So you have the local players really that are here. And do you find that South Asia and Southeast Asia have a lot of differences in the way some of these investments in your portfolio play out? Or do you think that the crossover is strong enough here? Do you mean a company starting in Southeast Asia also now looking at India as a market and vice versa?

26:55Well, raising capital. So, you know, because South Asia is such a different market from Southeast Asia. I think that's also one thing that is a play. They're both very, very different markets. So, you know, you're covering this entire region and then you're looking to, you know, to follow on capital. How do you find that playing between the two regions especially? I can talk about how things were like a year or two ago and how I see things, how I think things have evolved. A year or two ago, Southeast Asia was all the rage and India also. And it was quite separate. You had a lot of businesses in Southeast Asia that were like, I'm Southeast Asia only.