Spex Capital launches EUR 100m early-stage healthtech fund

Spex Venture HealthTech Fund, which was incorporated in Luxembourg in January, has so far received letters of intent from LPs worth around EUR 30m-40m that it hopes will soon be signed with new allocations becoming available, he said.

The Article 9 fund could raise up to EUR 150m, he added, as it hopes to gain some traction among other LPs in the next three months.

Once the capital has been committed, the UK-based firm will hold a rolling close to start deployment with 6-7 companies already identified as plausible targets from its first investment call, D'Angelo said.

The GP is launching the fund at a time when many LPs are preferring to allocate to established managers amid a capital crunch caused by the denominator effect.

"It is a very difficult time but we are seeing renewed interest now," D'Angelo said. "We want to launch now because all of the tech valuations tanked in 2022 and we can invest at softer valuations in survivalist companies that will probably have a good runway."

However, Spex has already completed six investments outside of the fund structure, including teledermatology provider Skin Analytics and digital-first health check-up company Live Smart. 

While Spex is for now focused on launching the health tech fund, it also has its sights set on further impact verticals, including food tech and climate tech. Spex Venture HealthTech Fund has been set up as a feeder vehicle into a wider investment impact fund to help attract wider LPs with an impact mandate.

The GP is also collaborating with a rating agency to develop a methodology for measuring impact that it hopes will become a benchmark across private assets.

Credit Suisse is the administrator and Deloitte the auditor of the 10-year closed fund.

To bolster the team, it has also hired Brent Stackhouse from Mount Sinai Ventures, to bring in experience of investing in the US and help portfolio companies expand overseas. 

Investments
The fund will look to invest in early-stage to Series A healthtech companies, with a focus on Europe. For early stage, it will look for an enterprise value (EV) of around EUR 5m-8m, deploying tickets of EUR 0.5m-2m, and Series A will look at EVs of EUR 20m-50m, with tickets up to EUR 5m.

It can invest similar size tickets into Series B companies where it has already invested but will not actively seek late-stage opportunities.

It is agnostic across health tech but sees mental health, chronic disease and femtech as particularly interesting subsectors.

Spex expects to make around 50 investments over the next four years, with around 70% of its investments based in the UK and Europe despite it being a global fund.

To help inform its investments, Spex has partnered with NHS accelerator DigitalHealth.London and life sciences hub MedCity, both based in the UK.

"Together with them we launched investment calls and within 6-8 weeks we attracted over 100 companies. This was done through a survey platform adapted for investments that can really help us separate the winners from the losers," D'Angelo said.

The GP has also already signed a partnership with a foodtech community that can help validate investments in that sector, once it launches future vehicles.

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