Tell us more about your current role with Cathay Health.
I’m a Partner at Cathy Health and my day-to-day job is to evaluate investment opportunities in the area of convergence medicine, which is the application of engineering and data technologies to solve unmet needs in healthcare and life sciences. We focus mainly in the US and Europe.
We invest in Series A to C companies. Series A companies would typically have proven their technologies in early studies and are on the way to obtaining regulatory approvals and gaining their first users; later-stage companies would need to show more substantial commercial traction.
You are a founder yourself. How does this differentiate you as an investor? Does this make you a better investor?
Yes, of course. I started my career in science and then joined Partners Group in their private equity healthcare practice. After a few years there, I took on several commercial roles where I was responsible for building new businesses – first in a corporate and later in startups. The goal was to sharpen my ability to evaluate these companies as it is very different being an investor versus an operator.
As an investor, one is normally looking down from a 30,000 feet level, which is quite removed from the day-to-day operations. I wanted to understand how companies come up with the right products or solutions, commercialize them, find the go-to-market and growth strategies. And I believe the best way to understand these things is through first-hand experience.
I had the opportunity to join Philips Healthcare where I eventually led the Asia Pacific imaging software business. That was quite a challenging role as it involved working with multiple parts of a large matrix organization and changing the mindset of people, convincing them to do something different than what they are used to, and at the end of the day, creating tangible quarterly P&L results.
I worked with leadership from various imaging modalities, and multiple commercial organization across South East Asia, Australia & New Zealand and South Korea. At the end of the day, it comes down to leadership – I learned so much about how to persuade and convince people to work with you toward a common goal. After doubling the revenue of that business, I brought the experience to work on two startups in health tech.
Operating businesses have strengthened my ability as an investor and sharpened my business acumen when I am evaluating startup companies and allows me to speak with founders and management teams with higher credibility as I have been in their shoes facing the same problems and opportunities.
What drives you?
My whole career has always been in the life sciences, albeit in different roles. I started in life science research, transitioned into private equity investments, and then to operating and growing businesses and now am back into VC investments.
I spend a lot of time thinking about how we can make healthcare access equitable to patients across the globe, and how can we make the system more efficient with the resources available so the right patients get the right care at the right time. I hope that by funding innovations that are designed to make healthcare smarter – for example discovering drugs faster, diagnosing diseases earlier, managing chronic diseases more cost-effectively, and caring for patients in the right setting – we can make small but meaningful steps toward that ultimate goal.
How do you spot the winners when it comes to investing?
It depends on the stage of investment. At earlier stages when the product is less proven, we put more emphasis on the science or technology and the team. What type of proof of concept do they have and why do we believe that this team will succeed? We have an affinity to invest in serial entrepreneurs who have built and scaled businesses.
For a later stage business, in addition to the product and team, we do deeper diligence on their regulatory and commercialization strategy – are they on the right path towards getting the necessary approvals? Does the go-to-market strategy make sense? What drives clinical adoption and would payers be willing to pay for their products and why?
Did you always want a career in private equity?
Not from the beginning to be honest. When I was a scientist, I was very focused on my research but at some point it felt too narrow for my liking. I started looking at the business side of life sciences, and that was when I discovered investments. After my stints in private equity and venture building, I am now back in investing but focus on early-stage life science companies. It has come full cycle for me as I am combining the various experience I accumulated over the years – from doing science, investing, building, and scaling companies – to fund the next generation of innovations that will help patients, which brings me a lot of satisfaction.
Who or what has shaped who you are?
My mother was always very entrepreneurial. She was quite curious and adventurous – when she got interested in something she would try to do it despite not knowing what the outcome would be. So I think part of that adventurous nature I have comes from her.
At the same time, her illness was a huge turning point in my life. I returned to Asia to care for her in her final months, and that break from academia gave me time to think about what I wanted to do with my life, and this set me on an entirely different path. I would have stayed a scientist if not for her.
What are market conditions like currently? How does this impact how you invest?
In the last decade, company valuations have been building up to unsustainable levels but in the last six or eight months, they have come down to more realistic levels. This is partly due to the rise in inflation and interest rates – investors have more alternatives to generate returns, so a lot of mainstream investors who were dabbling in biotech during the last two years cycled out of these high-risk investments. That led to a drop in valuations, but also made deals less competitive.
In the past few years, we may sometimes miss out on investing in some opportunities because we did not have enough time to do our due diligence, as companies were able close rounds quickly. This is no longer the case. Funding rounds are taking longer and we have more time to do proper diligence.
We are now seeing less new deals in the market but more extension round as investors, mostly insiders, are supporting their companies until they achieve their milestones and hit their value inflection points before coming out for a new round at higher valuations. Likewise, we are also spending more time monitoring our portfolio companies and doing follow-on rounds.
What is your view on failure?
“Failure is the mother of success.”
In Chinese, we have an idiom that says ‘failure is the mother of success’. You need to fail and learn before you succeed. So to me, failure is just a part of learning.
As long as you learn from your mistakes or your failure, I’d say it’s a good thing.
Any final remarks/advice to share with our readers?
For those who are at the beginning of their career, be open-minded. Always be hungry to learn. The world is changing very quickly. Your opportunity may come in a form that looks quite different from what you have planned for or imagined.