Global Corporate Venturing Rising Stars Awards 2018: Amit Aysola

Amit Aysola, managing director of Wanxiang Healthcare Investments, runs a Chinese corporate-backed venture group focused on investments in healthcare technologies, with an emphasis on digital health.

He said: “Since our inception in October 2016, we have made eight investments. We generally invest in seed rounds and look to participate in subsequent rounds as the company continues to grow and scale. Our portfolio currently consists of investments in seed through series D rounds.

“We combine a flat organisational structure with a practical business approach to ensure an efficient investment process. As a corporate-backed venture group, we do not use limited partnerships (LPs) and are therefore not subject to the typical time frames for exiting an investment.

“Our parent company, Wanxiang Group Corporation, is the largest automotive components company in China. The US subsidiary, Wanxiang America, operates the healthcare portfolio. We are based in Chicago.”

As Wanxiang is his first corporate venturing appointment, Aysola said what attracted him to the industry was that “corporate venture capital provides the opportunity for a more flexible investment framework than traditional venture capital.

“Without the need to raise capital from LPs, CVCs can focus solely on identifying and closing investment opportunities. As an individual working in a CVC group, I have the luxury of only investing in deals that are truly compelling, as opposed to addressing the need to deploy capital.

“CVCs can adjust their investment thesis, which is something that all venture groups should do over time in order to account for market dynamics. Balance sheet investing also results in fewer restrictions regarding the stage, structure, and time horizon. This affords overall flexibility and creativity.

“Finally, I was attracted to the challenge of building an investment portfolio in an industry that is non-core to Wanxiang. The prospect of an entrepreneurial endeavor within a large conglomerate was an exciting one.

“Despite being a non-traditional investor in the healthcare space, we have formed relationships with key players in the healthcare ecosystem, examples are 7Wire Ventures and incubators such as StartUp Health, and are establishing ourselves as a group that is committed to the healthcare startup ecosystem.”

In its first year, Wanxiang has made eight investments, including Livongo Health, Hello Heart, OM1, TrainerRx, ConsejoSano, Limelight Health, Doctor.com and Level EX.

And Aysola added: “By clearly communicating our fund’s focus and approach to investing, we have had the opportunity to invest in almost every company where we had an interest, with some of these processes being competitive.”

But this communication took time. He added: “Our biggest challenge, not surprisingly, was educating the market, including entrepreneurs, about our fund and our focus.

“I addressed this by taking the time to build relationships with CEOs, other VCs, and incubators. Given that we are a non-traditional investor in healthcare, we wo not be the right fit for everyone, so it is important that we are open about our goals and capabilities. The candour has been well received.

“Another factor that helped our group transition into healthcare investing was the opportunity for me to leverage my previous professional experiences when discussing a potential investment with entrepreneurs. “I have spent the majority of my career in the healthcare industry, starting at Deloitte Consulting, transitioning to a Health IT startup (Plan Data Management), and eventually moving to Healthcare Growth Partners (HGP), a boutique investment bank that focused on the health IT space. I have been able to pull from my broad range of experiences in reviewing opportunities in healthcare and advising entrepreneurs where appropriate. Importantly, the last six years of my career were spent at HGP, where I worked exclusively with early stage health IT startups and helped them to achieve their growth plans and successful exits.

“This specific experience helps me to effectively partner entrepreneurs, to gain an understanding of their goals and expectations, and tailor my approach as to how I can help them achieve success.”

As to the future, Aysola said: “I am passionate about and truly enjoy working with entrepreneurs that are looking to address the challenges facing the healthcare industry. These challenges can appear daunting, ranging from reshaping how healthcare is consumed to revamping the underlying technology infrastructure in the industry. I am looking to build a portfolio of the best and most impactful technologies that address this entire spectrum.

“From a company perspective, my goal is to establish Wanxiang as a long-term partner for entrepreneurs in the healthcare industry, helping them to grow to the next stage in their evolution and to add value along the way.”

And the focus on founders shines through his recommendations for the industry:

• “Increase transparency when communicating the investment group’s focus, objectives and investment process to entrepreneurs.
• “Be sure to ask the entrepreneur: “What are you looking for in your ideal partner”? The response will allow each side to determine whether the opportunity is a mutual fit.
• “Be decisive – give a quick no if you know that the opportunity is not a good fit. It is very important to be mindful of the entrepreneur’s bandwidth.
• “Consider creative structuring such as a staged-investment (multiple tranches) or non-dilutive financing such as a hybrid debt/equity approach – alternative structures can help align the risk/reward profiles of the two sides.
• “Provide clarity on how you can help a company. In some cases, we can help a company by drawing from my investment banking, operations, and consulting background to help grow the company and prepare them for the next raise or exit. In other cases, we will be more hands off and serve as a financial partner that can support a company as it grows. It is important that the investor’s value-add is clearly identified and that all sides are comfortable with this potential dynamic.”