IDGVI News: Portfolio News 2010

Perfint Healthcare treads new ground in cancer detection and treatment

The Economic Times, Bangalore | 6 August, 2010

by Archana Rai

Competition is not our immediate concern,” says S Nandakumar, co-founder and CEO at Perfint Healthcare, a four-year-old company that is treading new ground in detection and treatment of cancer.

Two years ago, the start-up developed a diagnostic device using robotics, which oncologists can use to probe and assess the nature of cancerous tumours. Now registered with a slew of patent offices globally, the product Piga CT has been installed in over 50 Indian hospitals and will soon be marketed across the Asian and East European markets.

“Our challenge is to demonstrate the benefits of such a device, as physicians move away from traditional forms of cancer treatment to more targeted forms of therapy,” explains Mr Nandakumar, who founded the company in 2007 along with a team of professionals who earlier worked with GE Healthcare in India.

The fledgling outfit planned to first offer product development services to other companies before gradually building a product of its own. But the founding team; with its experience in having helped develop, market and distribute the worlds first portable ultrasound device; were quick to spot a market opportunity in using robotics for cancer treatment.

“As investors who back technology, we first look for intellectual property and patents, then we look at the team. Perfint’s product for image-guided biopsy was based on their knowledge of the product market and the gap that existed there,” says Sudhir Sethi, founder of early-stage technology fund IDG Ventures, which provided the company with initial capital to grow the product.

This ability to raise strategic capital and mentorship has defined the rapid progress for this Chennai-based company. As early as 2007, IDG along with Accel Partners put in $3.5 million to take the team through the initial development stage.

This followed a period of shoe-string budgeting when the Perfint team worked with physicians to fashion a full-fledged prototype. “You don’t see such start ups in India very often unlike in the US, therefore to even sound credible in front of potential employees and peers was a challenge,” says Mr Nandakumar, who relied on a network of former colleagues, family and friends who provided money and support until formal investors would back the idea.

Now with one product in the bag, Perfint is all set to extend its product range from detection of cancer to actual treatment using minimally invasive methods. This follows a global trend where cancer treatment is moving away from surgery and radiation to less invasive methods such as ablation — removal of material from the surface of an object by vaporisation, chipping, or other erosive processes. “The challenge with ablation therapy is that the probe has to be placed right on the tumour to burn it completely without affecting the surrounding areas,” says Mr Nandakumar, who expects the product to be market ready by March 2011.

Such growth has attracted more attention from the investing community with a slew of investors led by global venture capital and private equity firm Norwest Venture leading a second round of funding of $7.2 million in May this year. “As a fund, we are very interested in medical technology to build devices and diagnostic equipment,” says Mohan Kumar, partner Norwest Venture India, who says Perfint’s big draw comes from the fact that it is competing in global markets.

For the start-up team, this global roll-out is opening up a set of unique challenges ranging from regulatory hurdles to acceptance for a critical healthcare device produced in India. “Made in India’ isn’t the most preferred label yet for high-tech medical devices and equipment,” says Mr Nandakumar, who is now looking to stitch together a global advisory panel that will help overcome the perception challenges.

“Anticipating the probable challenges that product companies will face is a part of the pre-investment process,“ says Mr Kumar, adding that product firms such as Perfint have to deal with such regulatory environments as they seek new markets. Apart from a push into Africa, Perfint is also planning an entry into the Chinese market in the next year. “In the next five years, we expect to have five products in the market and clock up revenues of $50-100 million,” says Mr Nandakumar.