Andre Mercanzini has now raised $70M for his important healthcare startup.
During his appearance on the Dealmakers Podcast Mercanzini shared his extensive startup journey. Including managing the failure of strategic partners and exits. As well as spinoffs, and the extra challenges facing technical founders, and in fundraising for healthtech startups.
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Andre Mercanzini is the child of first generation immigrants in Canada. They moved there seeking a better life than they had in Latin America.
He says it gives you a unique perspective and mindset. Arriving with little to nothing but opportunity in a new country you really have nothing to lose. You chase those opportunities with energy and dedication. In part to justify the great efforts and sacrifices your parents made to get you that far.
During the time he spent growing up in Canada there were a variety of free activities to take advantage of. He seized on those, as he knew his parents would like that they didn’t cost money. Like swimming at the YMCA and church league hockey.
One of the most significant was joining the Army Cadets. Which took him to join the Canadian military, and the experience of traveling the world for free.
Andre decided to continue his studies in Engineering Science at the University of Toronto. Then went on to study in Switzerland and at Stanford.
He was passionate about lasers and optics. Yet, the focus of his work changed when his mother died of cancer. It was a pivotal moment that inspired him to both think about the purpose of his work, and to dive into healthcare. Specifically honing in on biomedical engineering.
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Mercanzini’s case is one of those in which he began tackling an idea far before it was as trendy and obvious as it is today.
Entrepreneurship and fundraising for startups was much less popular in Europe at the time. As was the use of the type of advanced technology in healthcare that he began working on all the way back in 2007.
Together with his PhD Advisor, Professor Philippe Renaud, who had already been involved in 13 other healthcare startups, they began working on using surgical techniques and devices to treat brain diseases. Like Epilepsy and Parkinson’s.
They found neural technology as the answer for advancing treatment in a space which hadn’t seen much improvement in many years.
Drugs were expensive, and caused many side effects. So, they began applying microtechnology and nanotechnology processes in order to make smaller devices that could enter the brain with less trauma.
His startup Aleva Neurotherapeutics has made great strides in this space over the past 15 years.
Looking forward their vision is to continue to reduce the effects of medication that patients like those with Parkinsons have to deal with. Providing them with medical implants they aim to improve their day to day quality of life, so that they can enjoy it.
Still, it has been a journey with plenty of trials.
The Trials Of Entrepreneurship
In addition to the many challenges you can face with just your own product, there can be plenty of surprises and hurdles to overcome on the way. Aleva’s journey has been no exception to this.
One of the curve balls they were thrown was when a strategic partner which was instrumental in the devices they were implanting in people went bankrupt.
They sought to fix the situation by bailing out the partner and trying to acquire them. Unfortunately they were outbid. Luckily it was not one of their competitors, and they have been able to maintain a good relationship with them.
Another major challenge in the healthcare space is not only regulatory approvals, but the amount of capital you have to raise to get them. Aleva now has achieved that in Europe and, and their FDA Investigational Device Exemption in the US in 2022.
These are processes that take many years of work and waiting. All while having to manage your team and investors and partners, and keeping them patient as they wait for the results.
During this time they almost sold the company. Having achieved a notable milestone, and proving that they could work and deliver faster than their bigger incumbent competitors, there was an opportune moment to exit. They were approached for an acquisition. Only for the deal to end up falling apart after months of working on it, and devoting time and resources to it.
Fortunately, they kept the team together, and have continued to raise the capital to keep pushing forward on this important mission themselves.
To date, they have already raised $70M in capital.
After some initial investment from angel investors, Andre says that they have grown with about 40% of their funding coming from VCs. The other 60% has come from family offices of high networth individuals in Europe. Those with over $10B in net worth, that have experience investing in biotech and medical devices.
That was only possible after surviving the 2008 drought, which came just three months after they launched the company. They were able to survive on grants until 2010 when the angel investment market came back.
Storytelling is everything which is something that Andre Mercanzini was able to master. Being able to capture the essence of what you are doing in 15 to 20 slides is the key. For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here), where the most critical slides are highlighted.
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Listen in to the full podcast episode to learn more, including:
- Spinoffs to optimize value and focus
- The future of health tech
- Andre Mercanzini’s top advice for technical entrepreneurs