CRB Health Tech (previously CRB Inverbio), a Madrid-based venture capital management firm specialising in health technologies, has successfully raised €20 million for its latest fund, CRB Digital Health III.

The fund is focused on investing in innovative companies within the digital health sector, specifically targeting areas such as digital diagnostics that utilise artificial intelligence in diagnostics, digital therapeutics, and digital platforms for data integration.

The purpose of the fund is to support early-stage Spanish and European companies that have already secured clinical validations and regulatory approvals. CRB Health Tech plans to allocate investments across 25 projects.

This initial funding of €20 million represents a little under half of the fund’s intended target size of €40-50 million, with contributions coming from a diverse group of investors, including major entities in the pharmaceutical, banking, and medical distribution sectors, as well as family offices and individual investors.

Speaking with HBI, Alejo Costa Ribalta, the General Partner at CRB Health Tech who will be managing the fund, outlined the rationale behind launching CRB Digital Health III:

“We are making this move to address a different category of investment. Biotech presents a lot of attractive investment opportunities, however it blocks the capital for 10-12 years. Investors have made a lot of money, but not all investors are looking for this late and sometimes unpredictable type of return.

“This space can be seen as the merger of the Information Technology digital space and Health. It brings the benefits of digital investment, in terms of high growth, and in terms of faster returns to Health. This brings timeframes to 5-7 years. At the same time, the space presents lots of exit possibilities beyond Healthcare organisations, making it perfect for a fund.”

According to Costa Ribalta, there was an addressable need for the fund: “In Spain there was no fund 100% dedicated to digital health. Indeed, there aren’t many in Europe.”

The digital health segment is likely to grow everywhere, with CRB Health Tech predicting greater than 15% per annum growth across Europe over the next 5-10 years. But the firm is confident that digital health companies in Spain will outperform even this figure. 

“The space grows through new technologies that amplify the audience from patients to consumers. The digital health space in Spain is not at the level of Germany yet, but it is growing and coming closer. This is what we see in our own analyses – maybe 30% of opportunities within digital health that we review are within Spain, including localities such as Catalonia, Madrid, the Basque region and Valencia. We believe that Spain will outperform Europe in this growth area, as we anticipate regulatory reform similar to that in Germany in the near future, and opportunities coming from technology adoption.”

The raise

According to CRB Health Tech, the initial objective was to raise €30 million, but this was readjusted to €40 million, and then €50 million, due to stronger than expected interest. 

Of the first €20 million raised for CRB Digital Health III, €19 million was from private investors.

The firm informed HBI that five pharmaceutical companies are already in the investor base, and further confirmed that insurer Sanitas BUPA is within the investor pool as a reference investor, together with Nextlink Group, a global IT services organisation.

Spanish regulations allow funds to keep raising for a year and a half or so after opening, before having to close the fund.

In this context, CRB Health Tech informed HBI that the firm has, along with (multinational Spanish bank) Caixabank, “granted CaixaBank CIB a mandate to search for professional investors, including industrial groups, corporate ventures, funds of funds, and family offices in Spain and Europe”.

This presents an opportunity, according to Costa Ribalta, for CRB Health Tech to raise investment across Europe:

“The next step is to extend the raise a little wider, and we are now seeking more investment from across the rest of Europe. We are going to use this year and a half [before having to close the fund] to extend the funding by €20 million or €30 million.”

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