SINGAPORE: Esco Lifesciences Group, a Singapore firm that pivoted from washing lab gowns to making high-tech equipment, raised $200 million from some of the world’s biggest health-care investors, paving the way for a possible listing in Hong Kong this year.
The funding round led by Danish investment giant Novo Holdings AS and U.S. investor Vivo Capital also included Chinese sovereign wealth fund China Investment Corp., according to a statement from Esco. Other new backers include Singapore’s GIC Pte., with the fundraising giving the company a valuation of $800 million, according to people familiar with the matter, who asked not to be identified as the details aren’t public.
Esco is betting it can use the city state’s neutral status to acquire equipment makers across Asia, Europe and North America, while Chief Executive Officer Xiang Qian Lin is separately funding the development of medical treatments. Singaporean biotechnology and life sciences firms are raising money to help broaden the country’s economy from a finance and trading hub to an innovator in the global health-care space.
“We see the opportunity to become a platform for industry consolidation in this segment between East and West, ” Lin said in an interview, adding partnerships in China are also possible.
Esco declined to comment on GIC’s participation in the Series A round or its IPO plans. A spokesperson for GIC declined to comment.
Esco was founded by Lin’s parents in the late 1970s to sell disposable products, build so-called clean rooms for labs and offer laundry services for the country’s burgeoning electronics makers. But by 2000 the production of hard drives and semiconductors was shifting elsewhere and the family faced a choice — move up the food-chain to produce lab equipment or shift gears to become yet another property developer.
They chose the former, yet struggled to build their brand and supply chains. Their high-tech products had rarely been offered by Asian vendors before, let alone from tiny Singapore.
“I remember talk of possibly selling the condominium and mom saying she might have to work as a pharmacist again or get a regular outside job, ” Lin recalled. “As an adolescent, you don’t know the whole story of what’s going on but you see your parents working long hours and talking over dinner about certain difficulties.”
As business got better — thanks in part to the 2003 SARS outbreak — Esco expanded internationally with factories from Indonesia and China to Europe and the U.S. as it rode a wave of biotech innovation. Its bio-safety cabinets are used for handling pathogens; its platforms assist with in-vitro fertilization, and refrigeration units chill vaccines to super-low temperatures. In 2020 it posted $115 million in revenue, thanks partly to a Covid-driven surge. China is its largest and fastest-growing market.
For Novo Holdings — one of the world’s largest biotech investors with over $75 billion in assets under management — this is a chance to back an Asian-based equipment supplier at a growth stage, according to senior partner Amit Kakar, who will join the Esco board. Palo Alto, California-based Vivo Capital, the other lead backer, runs $5.8 billion in assets and will also appoint a director.
The funding will be used in part to finance new facilities and expand Esco’s contract development and manufacturing division, along with bolt-on acquisitions. Esco is preparing to list as early as this year, seeking to raise as much as $500 million in an initial public offering, according to people familiar with the matter.
Esco is far from a sure bet. It faces fierce competition from established Western brands that have the money and the reputation to dominate the market. Chinese vendors are also improving their quality as rising domestic demand and access to cheap capital fuel research and development.
“Esco’s product line-up isn’t on the high-end of the innovation spectrum; much of this is standard lab equipment, ” said Bloomberg Intelligence analyst Jonathan Palmer. “That said, I don’t see why they couldn’t compete in categories where they have an established beachhead and expand their offering over time.”
Lin says that’s a key Esco strategy: to find product niches the titans don’t dominate and grow leadership there.
While the vast majority of the new money will go back into Esco Group, Lin said some of his personal funds will go into other lines of business as separate investments. In June, Carmine Therapeutics – a business co-founded by Lin and incubated by EVX Ventures – signed an agreement with Takeda Pharmaceutical Co. to collaborate on the development and sale of non-viral gene therapies targeted at two rare diseases.
It’s one of several treatment developers that Lin said he plans to incubate or invest in around the world as he tries to build a global life sciences ecosystem. – Bloomberg