Helion Ventures exits LifeCell with promoters buy back shares

India-focused venture fund Helion Venture Parnters has exited Chennai-based stem cell banking and research firm LifeCell International Pvt Ltd, as the promoters bought back the shares held by the investment firm. The stem cell banking firm has shifted its operational model to community stem cell banking from private stem cell banking, in order to  maximise business potential.

Helion has invested Rs 35 crore in LifeCell to pick up 20 per cent stake in the company in 2013. The promoters bought the stake back for Rs 72 crore. The exit was formally completed in the first week of this month, said Mayur Abhaya, chief executive officer and managing director, LifeCell.

The investment from Helion has helped the company to bring down the prices, to beef up the volume and build up a larger inventory. The initial payment for storing a umbilical cord stem cell was at around Rs 48,000, followed by around Rs 4000 monthly payment. The initial payment has been slashed down to Rs 12,000 now, while the monthly payment remains almost the same.

The company has now announced a shift in its business model, from a private banking model to a community model, which allows sharing of preserved umbilical cord stem cells amongst the community of parents. This is beneficial for the customers, considering that only 20 per cent of the disease could be treated with own stem cell while the rest of the 80 per cent require a donor’s stem cell for treatment.

The community model would provide larger access to donor stem cells within the community and higher probability for finding a matching donor stem cell for treatments. Community banking also helps parents and siblings in accessing stem cells from the community pool, thus providing a comprehensive family benefit for treatments.

At present, it has 2 lakh customers and is adding araound 50,000 customers every year. With the shift in business model, the company expects around 2.5 lakh new customers to join in next four to five years. It will make the prices affordable and the new model will benefit the family 10-12 times more than what it was.

Besides, the company has also forayed into pre-natal diagnostics business by acquiring a company, Fetomed, from Chennai last year, for Rs 15 crore. The company has been into conducting new born screening for the babies in the last three years and the Fetomed acquisition enables them to do pre-natal diagnostics services. The company reaches out to 150 cities and the diagnostics services are currently offered in almost 50 of the top cities.

An additional Rs 20 crore will be invested on this business, in tie up with a German market leader on pre-natal diagnostics business, LifeCodexx, to bring in a non-invasive test into the pre-natal testing. The company will be looking at expanding its presence through inorganic growth in the mother and baby business which involves the diagnostics services. The investments will be from internal accruals and it is not looking at fund raising at present.

The stem cell industry in the country has around 12 licensed players, of which three — Jeevan, Reliance and Cryviva — have both public and private stem cell banking services. The market size in India is currently around Rs 200 crore, of which LifeCell is around Rs 125 crore, said Abhaya. He added that the company is expected to hit Rs 125 crore revenue this financial year.