"Over the last decade, the SIF team has made roughly 70 investments to support our mandate to leverage the foundation’s technical and investment expertise to stimulate innovation and make markets work for the poor. Our investments are intended to further the foundation’s programmatic goals – not to generate income."

Vidya Vasu-Devan

DEPUTY DIRECTOR, BILL & MELINDA GATES FOUNDATION’S STRATEGIC INVESTMENT FUND

January 09, 2019

Could you introduce us to the overall focus of the Strategic Investment Fund (SIF) and how it fits into the foundation?

The Bill & Melinda Gates Foundation’s Strategic Investment Fund is analogous to a corporate venture arm that makes investments in support of the foundation’s overall charitable objectives. The US$2 billion SIF is effectively a toolkit that can be used to partner with private-sector companies in any of our focus areas through financial tools such as equity investments, loans, and volume guarantees.

The SIF’s focus areas are aligned with the foundation’s overall objectives. One of the key areas is global health, primarily the eradication or management of infectious diseases in the developing world, especially in South Asia and sub-Saharan Africa. We also focus on maternal and child health, which includes family planning and contraceptives. Additional targets of our global development efforts include financial inclusion, agricultural development, sanitation, and nutrition. In the United States, our primary focus has been on education. We seek to ensure that all people, especially those with the fewest resources, can access the opportunities they need to succeed in life.

Over the last decade, the SIF team has made roughly 70 investments to support our mandate to leverage the foundation’s technical and investment expertise to stimulate innovation and make markets work for the poor. Our investments are intended to further the foundation’s programmatic goals – not to generate income. Any returns on investments are directed back to the foundation, ultimately furthering charitable impact.

One of the defining features of the foundation is unlocking opportunity within under-resourced communities. With respect to the U.S. biotech space, what has been the foundation’s strategy and thought process towards grants?

The primary aim of our work in global health is to support innovations and interventions to reach an eradication or control goal for specific infectious diseases. Because innovation comes from a wide variety of places, we offer support to organizations across the spectrum, including academia, nonprofits, and the private sector. There is a significant amount of innovation within health care and biopharma companies, and investments are an important tool. While innovation is happening everywhere, we also want to make sure that we tap into the best and brightest in the infectious disease space right now. We are quite agnostic regarding our geographic focus in terms of investment.

Right now, other therapeutic areas like oncology and neurodegenerative diseases are attracting significant amounts of venture funding. Several companies in these spaces are focused on understanding the immune system and how we can manipulate it to fight such health conditions. Since the immune system is also critical in infectious diseases, a significant amount of the learnings and tools from other therapeutic areas can be applied to the foundation’s priority diseases. As a result, the SIF team invests in these companies to leverage the products and technologies for diseases like HIV and TB. Additionally, we always look to support companies dedicated to eliminating infectious diseases. For example, SIF made an investment in VIR Biotechnology, a San Francisco-based company focused on finding innovative solutions to unmet needs in infectious diseases. They have raised a substantial amount of capital and are a unique example of more capital moving into the infectious disease space.      

Could you elaborate on the cross collaboration happening between different therapeutic segments and how the SIF is facilitating this?

In 2015, the foundation invested in the German company CureVac to accelerate mRNA vaccine technology development. CureVac manufactures unmodified mRNA as a drug product, which effectively gives the body instructions for creating its own proteins to fight cancer and infectious diseases. Although there were applications for its technology in infectious diseases, their primary focus was oncology. SIF made a US$52 million investment and attained a set of rights to work in partnership with CureVac to bring additional non-dilutive funding to the table to deploy its platform against infectious diseases. Our goal was to ensure that this breakthrough technology would be leveraged for getting low-cost vaccines that prevent infectious diseases to the people who needed them most.

Apart from the United States, in which geographic areas is the SIF focused on investing?

SIF is a concerted international investing effort. One of our long-standing team members is based out of London, and his team has spent the last two years building relationships and making investments in the European biotech community and developing our investment efforts in tech-enabled delivery of health, agriculture, and financial services in India. We have also investigated opportunities in Israel and China, and have worked with large pharma companies in developing countries in South Asia and sub-Saharan Africa.

What is the SIF’s vision moving forward?

The SIF aims to continue searching for international investments in which the foundation can play a unique role accelerating innovation. A significant amount of our search efforts has been focused on Europe and India, and our aim is to also start focusing our investment search on sub-Saharan Africa. Additionally, we are working on further developing our market delivery strategy for the innovations in which we invest. We want to encourage readers to point any private-sector innovations within the areas the foundation works towards SIF.

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