The Joint Polish Investment fund (JPIF) Invests €500k - €1.5m in Polish Early-stage Digital Health products
Axel Polack has a medical background and started out as his professional life as a scientist in clinical molecular biology. After which he was a General Manager of a startup called ITN (now Ascenion) for 3 years. He then joined TVM capital for 14 years where he was responsible for deal assessment and deal monitoring. Since 2015 Axel is a General Partner at the Joint Polish Investment Fund, which is a venture capital fund powered by the Polish Government and private investors. The fund has made 8 investments so far of which Axel is responsible for two.
The Investment capital originates partly from the Polish government, making the fund tend to pay more attention to Polish startups and teams. The fund is also obliged to invest in High-Tech. The fund is centred around Life Sciences with a special focus on Med-tech, diagnostics, instrumentation and Digital Health. The fund wishes to combine the advantages of mobile devices, new sensors, and big data analysis for the patient benefit on the basis of optimal disease management.
JPIF is an early-stage fund whose average ticket size for initial investment is €500k - €1.5m, after which the fund supports the companies in it’s A, B, and C rounds.
The JPIF deal process is one where startups usually approach the fund. Active sourcing encompasses screening of outstanding work at academic institutions and encouraging teams to start companies. Due to its good visibility in its target market, the fund sees 70-80% of the cases that get finally funded. During the first level of due diligence medical need, competition, team skills, and economic value is analyzed.
If this comes out positive the project is analyzed in a second in depth due diligence encompassing “key opinion leader” interviews, analysis of the positioning of the product in its future competitive environment and an in depth intellectual property (IP) analysis. Existing patent protection is not a prerequisite for the fund but a very good chance for a strong future IP position with “freedom to operate” is needed. The process from first contact to closing a deal takes on average 6 months.
For JPIF a superior quality of the technical solution combined with a high degree of innovation is essential. Axel mentions that he would rather like to see a totally new, “disruptive” solution than a “me-better” version of something already in the market. Despite all the innovation, the team has to present clear and measurable milestones which are credibly budgeted.
Why do venture capitalists miss to finance good opportunities? Axel explains that among other things early-stage teams often miss to present clear no-go decision points and “killer experiments”.
The fund has one successful exit where it sold an instrumentation company to a big player in the market. It started out as an alliance between the two companies which turned into an acquisition. The fund has supported a company developing a mobile spirometer (https://aiocare.com), an “application (APP)” enabled medical device for lung function testing. Use of the device helps asthma and “chronic obstructive pulmonary disease” (COPD) patients to better manage their disease.
Before approaching VCs entrepreneurs should have good answers to the questions raised above and present a solid plan for the “use of proceeds” based on credibly financial planning encompassing clearly defined milestones!