In conversation with Dr. Shyam V. Rao & K Chandrashekhar (Founders, Forus Health), Anand Daniel (Accel Partners) and Soumitra Sharma (IDG Ventures India) on IDG and Accel’s US$5mn investment in Forus Health.
Investment in Forus Health by two mainstream investors like IDG Ventures India and Accel Partners is a big news and qualifies to be called “a landmark deal” for more reasons than one. I believe this has highlighted 2 big trends – Social Startups are moving beyond the tag of Social to becoming Scalable ventures, Mainstream Investors are putting money (hopefully we will see more of this) if you can create Sustainable Impact. Having known the key players in this deal closely, I cannot help but bring to you the perspective of the investors and entrepreneur and show you in the process why we all in the Indian Startup Eco-system need to celebrate this deal.
YS: What makes Forus’s technology a benchmark in the market?
SVR: Prevention is better than cure, is a known fact for several decades; however this is very easily said rather than done in today’s context of healthcare. Our entire healthcare notion has been heavily focused on curation and is extremely hospital centric. Forus is pioneering to shift this paradigm from curative treatment to preventive care and create a new wave in the healthcare market with highly scalable, easily accessible and affordable innovations and healthcare products and technologies. We have derived inspiration from various cutting edge technologies from allied fields of engineering like consumer electronics, power electronics, opto mechanics, cloud based computing, decision support systems data mining and machine learning.
And most importantly, wrapped all this in such a user friendly way that even rural health workers can take good images of the anterior and posterior of the eye with minimal training using 3nethra – our flagship product. In India and also developed countries, chronic disease is a big burden and the only way someone can leave with this is by managing it very well. This also calls for preventive technologies for periodic screening/ check-up. With our products like 3nethra, we have setup a benchmark for promoting easy screening where instead of “patient go to hospital” we have “hospital go to patient”. Today we can confidently say this, with our experience from 30+ installations of 3nethra pan India in the last one year.
YS: What Differentiates Forus Health!
KC: Our solutions can be easily replicated across other countries and geographies hence it brings scalability and sustainability to the venture. Our products and solutions enable mass screening outside hospital environment and helps funnel more patients to the healthcare ecosystem. This way we use our scarce specialists’ time effectively in treating patients rather than screening. Forus health is a pioneer in its approach towards creating complete solutions rather than being a pure play medical device company. Another key differentiator is that these solutions can be easily integrated into existing healthcare ecosystem and enable them scale and offer services to their customers that they were not able to provide earlier. It also expands their service network beyond traditional hospital environments for eg: Diabetic centre, diagnostic centre, mobile vans, vision centres can easily offer comprehensive eye screening solutions at much reduced operational cost and this coupled with telemedicine and data centre solutions truly enables reach.
SVR: Our target audience for preventive care is the entire population, so for India – we are talking about 1.2 B people. Technology has to be very effectively used to make this happen. Just having an innovative medical device is not going to solve the problem. Once a patient is detected for a problem, the next question is how to treat him/her? I think this is where we are different wherein we have setup a new benchmark for a holistic care solution. This utilizes our intelligent software, which helps filter and classify the patients and then using mobile technology we are in a position to quickly reach out care to the needy. This is only possible if we work closely with medical fraternity and hospitals. Forus can be an enabler of technology but ultimately it is the doctors and hospitals which deliver care. We have several such doctors and experts with whom we have close co-operation in realizing this common vision of democratizing healthcare.
YS: Forus Health’s funding by marquee investors like IDG and Accel is a big news for the entire healthcare product startup eco-system. Tell us what does this mean to you as a startup entrepreneur?
KC: Forus Health is a technology organization focused on developing products and solutions that address health care delivery needs of India like countries.Investors like Accel Partners and IDG Ventures India showing deep commitment to support this mission will really go a long way in bringing the desired change in healthcare delivery, a big gap in countries like India. We strongly believe that there are a lot of opportunities in the healthcare product space. We are very happy that investors like Accel and IDG, key players in the global investment space have shown confidence in our mission and our approach . We will now be able to build a large Indian product organization and create a larger impact. As a startup entrepreneur focused on making affordable quality healthcare products, timing cannot be any better.
YS: As an entrepreneur what drives you at Forus?
SVR: Passion, Passion to do something for our people, our country and human well-being at large. Today 80 % of the blindness could have been avoided out of 12 million blind in India and around 40 million in the world. If we can save even 1% of the population getting blind, then we are talking of saving 40,000,00. Loss of productivity due to blindness is estimated as 5 Billion $, so effectively we not only save huge population getting blind but also save 500 million $ (Rs. 2500 Crores) in terms of productivity every year. With the growing diabetic population, 20 % of those diabetic are at very high risk of getting blind. In India we already have 51 million diabetic, so roughly 10 million of these can be carefully managed if they get their periodic checkup and medication and out product 3nethra plays a very vital role in this screening.
KC: We started this initiative with one clear mission – “to create a differentiated technology company , which will build innovative products in the Preventive Health space”. The initial motivation was to convert “a power point to a product”. Now that we have our product – Our drive is to see, how can we create the impact , we really worked for, all these years.Today we get energized , when we know/experience/hear that our solution could change the lives of people. When we see our product being used in a mobile van or vision centre and it identifies a problem that was earlier not identified due to lack of devices or availability of skills we know we are on the right path. The satisfaction and smile on patients is enough to drive us our entire life.
YS: Forus Health – Your Vision as Entrepreneurs!
KC: Our vision for Forus is to create products and solutions for India and other emerging countries that can be taken across the world. Our focus is to create solutions that are affordable, portable and easy to use thereby enabling reach and making quality healthcare available at a patient’s doorstep. Our focus is “pre-screening” a.k.a preventive screening. With doctor to patient ratio being very skewed in emerging countries (1:2,000) and more so for specialties like ophthalmology (1:60,000), we will create products and solutions that will enable pre-screening on a large scale. We will extend our products to cover larger health problems like nephrology, neurology, cardiology, etc to build preventive screening solutions. We see Forus Health growing into a unique screening solutions company and a trendsetter in this space.
YS: What can we expect in the near future?
SVR: Forus is just 2+ years old and within this time we have made a humble beginning by putting some of products in the market. Most of these installations are in large hospitals and heavy duty centers with initial trial orders for one or 2 units each. We are already seeing overwhelming response from the users and also lots and lots of new requirements. So, we first focus on drastically expanding our installation base, then add more useful features to the existing products and also develop very specialized variants for different segments/ ologies in healthcare. We also see the need for providing packaged solutions to the end users as this can make their ROI better and business sustainable. We are working on such packaged technologies, ECO partnerships and government programs, through which we can quickly reach out to the masses with our products and solutions.
YS: How difficult is it to build a product venture out of India?
KC: While I would say it is reasonably difficult to create a product venture out of India, it is not as difficult as having the “will” to create a product venture out of India. Product ventures have long gestation periods but have the ability to create a larger impact. Initial seed capital for creating products will go a long way in creating more product ventures out of India. Our ability to attract the right talent has been our greatest strength and our team share the common vision and mission of creating a larger social impact. Entities like DST and NASSCOM, did give us the initial support.
YS: Startup Team at Forus Health…
KC: Our team is our biggest asset and they worked towards realizing the dream of building a world class product from India. We have one of the best experienced team, one can find in any technology organization. This is primarily due to the fact that Shyam was able to attract the best brains from the industry and academia. The pride of creating a product from India is what drives us every day and every single person chose to work with Forus Health despite having other options. Forus strongly believes in Partnerships. Forus’s early association with premier Indian institutions like IISC, IIT, IIM Ahmedabad etc, partnerships with technology organizations at initial stages of product development, global academic institutions like University of Texas and Jim Carrey Institute and health care providers (who validated our idea and our product) helped us in rapid commercialization from concept to product. For eg: our product 3nethra took 2 years from being a concept to a product in the market. For a startup company we have interns from premier institutes etc working alongside us and living our dream.
YS: Limited resources! Strong Market Adoption
KC: We owe our initial success to our doctors and ophthalmologists from all over India who were our early adaptors and gave us valuable feedback on key product features and opened their doors to us always. We also focused our efforts in creating case studies for each “business”usage scenarios (what is the business benefit for customers) and this helped in market adaption on a larger scale.
SVR: We participated in various innovation forums and to our pleasant surprise had every person and organization endorsing our idea and our product. 3nethra has till date won over 10 innovation awards under various forums in India and outside and this helped in market adoption as well.NASSCOM, India Semiconductor association(ISA) – premier associations representing technology developments from India support our organization as well as guide us by providing the right platform to showcase our product and organization.
YS: Moving to the Investors, tell us what excited you about Forus Health?
AD: Forus has all the things an investor would look for. They have a passionate team (led by KC and Shyam) that has built a really good product and have customer traction among thought leaders throughout India.
SS: During our several interactions with Shyam and KC, we were extremely impressed by their passion to enable inclusive healthcare delivery utilizing cutting-edge technology, and their vision to build a global category leader in ophthalmology devices that combines both large-scale social impact and commercial returns. It’s rare to see quality IP-driven medical device technologies coming out of India – Forus’s disruptive image-guided technology platform ‘3nethra’ was a key differentiator for the venture from our perspective. Being one of the select VC funds in India that understand medical devices, we appreciated Forus’s technology, business model, early domestic traction and global market potential, and are confident of the venture becoming a global path-breaker in the ophthalmology devices space.
YS: How do you see the healthcare space evolving in India? What are some of the key opportunities according to you?
AD: I see more entrepreneurs coming out of healthcare MNCs with good product experience and starting medical device companies. Two such examples are Perfint and Forus (both Accel portfolio companies). This is a great positive trend and there is immense scope for reverse innovation out of India in the medical device space – products that are designed for the Indian conditions but can be eventually sold globally. I had blogged about this here.
SS: We feel the Indian healthcare space is ripe for entrepreneurial disruption. Till now, it’s been a challenge to deliver effective, affordable and inclusive healthcare to 1.2 billion people. However, we are presently seeing a new wave of Indian entrepreneurs that are challenging the status-quo through both technology and business model innovation. As early stage technology investors, we see a tremendous opportunity for technology enablement of healthcare in India. The Indian medical devices space is growing exciting by the day. Ventures such as Forus and Perfint have taken the lead in targeting the ophthalmology and oncology segments respectively; there is scope for similar ventures that are intellectual property driven, led by strong teams and addressing large healthcare verticals. With healthcare delivery getting increasingly de-centralized and dispersed, another area of opportunity is cloud-based business models such as SaaS based delivery of healthcare enterprise software, tele-medicine and remote diagnosis. Finally, with close to 120 million Internet users and more than 700 million mobile subscribers in India, a key opportunity is utilizing these platforms to deliver efficient healthcare services and information.
YS: What can we expect from Forus in the future? As investors, how closely do you plan to support the venture?
SS: Forus has created a strong IP-driven image guided technology platform, and already has an installed base of close to 30 units with marquee customers. The beauty of the platform is that it offers a strong value proposition across both the ophthalmology space and general healthcare eco-system. Going forward, the focus will be on cementing Forus’s leadership in the Indian ophthalmology screening space by increased penetration across customer segments such as Ophthalmology hospitals and chains, stand-alone ophthalmology clinics, diabetes hospitals and clinics, general diagnostic centers, General Physicians, Opticians and Optometrists. The Company is also receiving strong in-bound queries from both emerging markets such as Latin America and Africa, and select developed markets. As with all our portfolio companies, IDG Ventures India will actively support Shyam and KC on key strategic issues for the company such as scaling the domestic operations, entering international markets, recruitment and team building, follow-on fundraising etc.
YS: Will we see more investments in this space?
SS: Healthcare, together with education and energy, will be one of the most prominent investment themes for this decade, both from a Venture Capital and Private Equity perspective. Going forward, we expect to see vibrant investments especially in areas such as medical devices and other technology-enabled healthcare segments in enterprise software, Internet and Mobile.
YS: Your advice to entrepreneurs in this space?
AD: Focus on solving a real pain point in India where you can build a sizable business. Attract a small but capable team that can execute on building a world class product at Indian price points. Get early pilot customer traction from thought leaders in the domain.
Read about the funding news here.