Life Science in India

APIDC Venture East is looking to raise $100 million for its second fund this summer to invest exclusively in Indian life science opportunities.

The firm plans to expand its limited partner base in the U.S. and Europe, according to APIDC Venture East Advisory Board Member and Oxford Biosciences Founding Partner Ned Olivier.

Venture East Life Sciences II is more than double the size of the Biotechnology Venture Fund, a $37 million effort the firm raised in 2005. The firm’s first fund took an investment from the Andhra Pradesh Industrial Development Corp., a governmental entity designed to foster innovation. The Hyderabad-based firm has since bought out the investment of APIDC. Other investors include the International Finance Corp., India’s Life Insurance Corp., Andhra Bank, the Saudi Economic Development Corp. and India’s Technology Development Board.

Although the first fund has “biotechnology” in its name, it actually invested across the life science spectrum, Olivier says. The firm has made 16 investments and has not yet recorded an exit.

“This fund, even now, is already up 25% per year,” Olivier says. “We expect to do better than that. Some of the major pharmaceutical companies are interested in expanding their operations in India both through organic growth and through potential acquisitions [of our portfolio companies].”

The second fund will likely be announced at the firm’s annual investors’ meeting this May in India, Olivier says.

Most of the firm’s management took a special purpose acquisition corporation (SPAC) public this February, raising $80 million in its IPO and another $10 million via a greenshoe. The SPAC, called the Trans-India Acquisition Corp. (AMEX: TIL.U), will invest its money into a single Indian life sciences company, or perhaps a roll-up of several smaller companies. It gives the Venture East team an opportunity to invest in a later stage venture growth type opportunity.

The AMEX stock listing may be less volatile than a listing on an Indian exchange and could be more easily used as currency for an acquisition, Olivier says.