Digital healthcare experts criticized local conglomerates for hurting the growth of the digital healthcare sector. They said large companies were only interested in using digital healthcare ventures’ technologies, rather than nurturing them.
The critical comments came at a seminar during the “Digital Healthcare Fair 2018” at KINTEX in Goyang, Gyeonggi Province, on Saturday. The Korean Doctors’ Weekly, the sister online newspaper of Korea Biomedical Review, hosted the seminar for investors in the digital healthcare sector to discuss what to look in digital health startups to invest.
Choi Yoon-sup, a managing partner at Digital Healthcare Partners (DHP), said he has met many “rude” officials at conglomerates who would make “absurd proposals.”
“Just because they came from a large company, they seemed to be thinking they could be overbearing and making high-handed suggestions. But they didn’t know about the digital healthcare market. They should do their homework first,” Choi said.
He went on to say that digital healthcare startups or ventures might have to spend too much opportunity cost to use a conglomerate’s resources. “In this case, the conglomerate would be better not entering the digital healthcare sector. Large companies should first ponder upon why they are trying to do digital healthcare business,” Choi said.
Park Su-jin, investment director at Partners Investment, said Korean conglomerates take a domineering stance when approaching healthcare venture firms.
“Rather than seeking a win-win strategy, they offer conditions that make it more difficult for venture firms to grow. I tell venture firms to reject unhelpful offers,” she said.
In contrast, large firms which have grown from small ventures provide business models for joint growth with startups. “Conglomerates should make efforts to have a perspective of coexistence so that they and ventures can grow,” Park emphasized.
Moon Yeo-jung, investment division director at Intervest, said venture capitalists feel that their contracts with conglomerates have many unfair conditions because large firms’ investment decisions are made at the new business division level.
“I had once received a call from a conglomerate canceling a joint investment deal for a digital healthcare venture, just one day ahead of the deal signing,” she said.
Moon picked Hanwha’s Dreamplus or Lotte Accelerator as the most wanted investor companies that venture startups seek funding. “Even though the two have the conglomerate titles, they do not demand venture firms have the new technologies exclusively bound to the contracts between them. The two investment firms offer something extra,” she said.