When Latvian startup Koatum, a winner of last Pitch Challenge at Life Sciences Baltics, was launched in 2014, Sergey Jakimov, CEO, could not imagine that after four years his company will be creating useful tools for medicine with an US company and will be planning to step firmly into the US market.
In 2016 Koatum, that offers advanced bio-active coating for medical implants, participated in a Pitch Challenge organized during Life Sciences Baltics forum. The team showed the best pitch and won one week visit to Akron accelerator, one of the leading US technology business hubs.
This year, September 24-25, Vilnius again will be full of life sciences startups from Lithuania, Latvia and Estonia. They will be taking part in Life Sciences Baltics 2018 Startup Masterclasses. Pitch Challenge will be held again and 10 startups teams will be chosen to pitch their ideas in front of investors, industry professionals and public. A winner will be awarded with special prizes. Registration for free of charge Startup Masterclasses is open till 1 July. You can register your life sciences startup here.
Before the forum and Masterclasses we are talking with Sergey Jakimov about med-tech startups and what advices he can give for entrepreneurs that develop products in this field.
– Could you shortly describe what products Koatum is creating?
– Koatum does advanced bio-active coatings for medical implants. By medical implants I mean either the ones for orthopedics, dental or reconstructive surgery. Now we work mainly in orthopedic and dental sphere. By advanced I mean that we are one of the only in the industry that are doing coating combinations. We are doing very thin and flexible layers that can enhance effect of antibiotics. So we are creating drug delivery systems combined with different properties.
– Koatum was established in 2014. How it was started?
– We are a merge between the scientific and entrepreneurial team. We are the classic scheme of science based startup where we have very specific technical knowledge, people that develop our technology, and on the second half of the table we have the entrepreneurial picture that manage the company.
– You have already gotten pre-seed and seed investment. What is the most challenging while pitching your products to investors?
– I would not say that we have anything challenging. Once you pitch a live sciences startup to investors big chances are that investors are already interested in life sciences. So there is no problem of explaining the concept to them. The main thing investor would want to tackle in your pitch is a regulatory path because once you are doing medical products the regulatory path and certification is the most important part. And then you must show that you understand in what stage you are in and what you need next. Not just say ‘we need 500 thousands’ and add something obscure.
– How would you describe difference between working in med-tech sphere and other life sciences fields?
– Med-tech is good in terms of its receptiveness to innovations. The problem is the regulatory path. So once you deal with that, hospitals, clinics, manufactures, patients will be quite eager to try solutions that would advance their experience and enhance their lives.
It is very capital intensive industry. So you need a lot of money to go forward. And it is also time consuming industry which means that if you are doing more or less sophisticated medical project
you cannot claim that it will be in the market in one year. It is just physically impossible.
– Do you think competition for investors’ money is at a high level in life sciences field?
– I think every sphere of med-tech or bio-engineering has certain competition towards money. On the other hand, with the recent developments, especially with the EU funded national programs, I think that there is plenty of money. You just need to know where to search.
– Two years ago you took part in Life Sciences Baltics Masterclasses for startups. What did these classes give to you?
– We had a very good coach that told us about developing idea, how to present it to investors and other useful things.
For us the Pitch Challenge benefited as the tool to adjust of our pitch to the expectations of the public. We already had a number exploration programs so we already had our message ready. All we needed was another look. We had it and it was useful.
– You won the challenge and got to visit one of US accelerators. What did it give to Koatum?
– We went to Akron accelerator for a week. Akron is a hub for med-tech and engineering sciences. This was the first ‘US capital’ for rubber. So all rubber industry evolved from Akron. After that they switched to med-tech and engineering. Akron has one of the largest integrated hospital networks in the US. There we met a lot of contacts. With one of the contacts we are starting to develop a new product. The visit was beneficial and a new project was an argument for us to go raising again for capital.
– What advice could you give for other Baltic startups that are working in life sciences field?
– The advice is very simple – try to validate your product as fast as you can. By validating I mean not validate clinically but get reputable source from industry saying that if this would exist as a product it would be beneficial. By having this it opens doors for the first capital. Investors understand that if you are not in advanced stage you do not have money to get the product ready so they will not ask for it. They will ask for a thing that actually does not need a lot of money. And it is an industrial opinion.
– What are Koatum plans in the near future?
– Now we are finishing the next investment round. Our next milestone is to get into the US market in dental sector. When we settle with it, we will go to orthopedics. One more piece of advice for startups would be to understand that you will not have enough money to cover many spheres. So pick one and stick to it.