India’s largest exclusive diabetes care provider, Dr. Mohan’s Diabetes Specialities Centre today announced that it has raised Series A investment of $10.23 million (Rs. 66 crores) led by Lok Capital advised Growth Fund – the third fund from Lok. This is the first round of institutional funding for Dr. Mohan’s, since its inception in 1991.Dr. Mohan’s will use the funds to scale rapidly; develop a pan-India presence and grow from a base of 25 clinics to 100 in the next 4 years. This round of funding also counts Evolvence India Fund as co-investor. Venky Natarajan, Managing Partner, Lok Capital and Ajit Kumar, Managing Director, Evolvence India Fund will join the board of Dr. Mohan’s. Veda Corporate Advisors (“Veda”) was the exclusive financial advisor to Dr. Mohan’s for this transaction.
Founded by internationally renowned Diabetologist, Dr. V. Mohan and his late wife Dr. Rema Mohan, Dr. Mohan’s is one of the earliest organised players in the diabetes care market in India. Dr. Mohan, personally, has been at the forefront of diabetes care in the country and has built a robust delivery model for diabetes care and an asset-light business model that has so far scaled to 25 centres (2 hospitals, 22 clinics) across seven states of India. Dr. Mohan’s has used a very effective hub and spoke model to deliver comprehensive diabetes care to patients in both urban and underserved rural areas of Tamil Nadu, Karnataka, Andhra Pradesh, Telangana, Orissa, Puducherry and Delhi. The team of specialists at Dr. Mohan’s have treated over 400,000 patients thus far.
Talking about the firm’s first institutional fund raise, Dr.V. Mohan said, “Our aim is to bring the best of diabetes care to centres across India; particularly to states and districts where specialized diabetes services are not available currently. The series A funding will help us accelerate expansion plans and triple our footprint in India in the next 4 – 5 years. We are delighted to have Lok Capital and Evolvence on board, whose significant knowhow and track record in healthcare will strengthen our hands and contribute to our goal of quality diabetes care for all Indians.”
According to Deloitte Touche Tohmatsu, the Indian healthcare industry is expected to reach USD 280 billion by 2020. Single specialty healthcare facilities have been a dominant theme in the Indian healthcare landscape in recent years. The International Diabetes Federation (IDF), estimates that India will become the diabetes capital of the world; number of diabetes cases is expected to be over 100 million by 2030, from about 70 million today and the market for diabetes care is currently estimated to be a whopping Rs. 12,000 crore.
Diabetes incidence is no longer an urban phenomenon, with increasing cases of diabetes in rural areas as well as amongst urban lower-income communities. A study done by the Director General of Health Services (DGHS) shows that one out of every four persons living in the urban slums of Chennai suffer from diabetes — which is three times higher than the national average of about 7%. The slums of Bangalore and Ahmedabad also recorded higher than average rates of 14.77% and 13.37% respectively. Diabetes also imposes a more than proportionate cost at the bottom of the pyramid; it is estimated that for a low-income Indian family with an adult with diabetes, as much as 25% of family income may be devoted to diabetes care.
Affordable healthcare is an important part of Lok’s investment thesis. The cornerstones of the thesis being: creating access to underserved markets, proven expertise in delivery of high quality clinical services and delivering care at affordable price points.
Announcing the latest investment, Venky Natarajan, Managing Partner, Lok Advisory Services, said “The diabetes care market is still largely addressed by single doctor set-ups. There is a huge whitespace for an organised care provider to build a pan-India chain offering holistic care for diabetes. The team at Dr. Mohan’s comes with very high pedigree, have pioneered diabetes care in India and are world renowned for their quality of research in the field of diabetes. The team has also built a scalable and asset light model that can now be rapidly deployed across India. Dr. Mohan’s is a unique asset today in the Indian healthcare landscape and has every chance to remain so.”
Speaking about the investment, Ajit Kumar, MD, Evolvence India Fund said, “We are very pleased to partner with Dr Mohan’s Diabetes Specialities Centre. Diabetes is a growing epidemic in India and one that affects millions every year. We believe Dr Mohan and the family has been at the forefront of diabetes care and research in India and have built an excellent network of state of the art centres to provide diabetes treatment and are now poised to further expand across India.”