Why this entrepreneur decided to launch a make-in-India medtech startup after his family business was sold for $330M
You’re in your mid-thirties and your family business gets sold for more than $300 million. What would you do next?
For Ankit Kedia, starting up was a no-brainer after packaging giant Manjushree Technopak, which was built over four decades and had marquee names like Coca- Cola as clients, was sold last year.
But, he felt that it was important to find the right sector to start up in. A sector where there was a gap that he could successfully bridge.
Ankit Kedia, founder of Caremont
“I realised I had to do something in the medical field. After selling stake in Manjushree, I saw the gap in the field of medical and healthtech equipment. But I had to understand that market first before getting into manufacturing,” says Ankit Kedia, the Founder of Caremont.
Bengaluru-based medtech startup Caremont, founded in 2019, offers “the very best in healthcare products and services” by providing quality medical equipment and devices.
Ankit began by thinking of importing medical devices and spent all of 2018 understanding regulations.
Medical products such as spinal needles, heart valves, annuloplasty rings, syringes and needles, cochlear implants, cardiac stents, catheters, and others need to be registered for import. Any company, keen to legally register or import medical devices must comply with the rules of the Drugs and Cosmetic Act of 1940.
In case, the company does not have a registered office in India, it must hire an “authorised agent” to manage registration and other related processes. An agent, authorised by a manufacturer, plays a very important role in the registration procedure and “is involved in business activity, post-market surveillance, and pre-certification”.
Ankit realised that some items involved very low duties, but would make the highest impact. He also found out that some medical items could be manufactured in India at lower costs.
Beginning with distribution
During this time, he met with global pharma companies Olberon and Halyard Health and convinced them that he could take over distribution of their products in India.
“Once you fix the distribution chain and understand what the market wants you can enter manufacturing,” Ankit says.
Four months ago, Caremont began distribution of Olberon and Halyard Health products in five cities.
The company’s Halyard contract lets it sell clinical drapes, gowns, masks, gloves, knee arthroscopy preparation drapes, and surgery gowns.
For Olberon, the company distributes ENT diagnostic devices such as Ottorhinoscope and vein-finding consumables, including vein-finding tourniquets for pediatric care.
As of now, Caremont is distributing 80 products and has started working with five hospitals.
From distribution to manufacturing
“Many companies export devices to India from point of origin. We want to make in India, with 50 percent manufacturing abroad and 50 percent here. This will bring costs down and we can reach many more hospitals,’’ Ankit says.
Caremont has acquired land in Bengaluru to set up a large manufacturing facility. It is also setting up an R&D centre where products will be prototyped for manufacturing using 3D printing. It plans to later invest in dyes for manufacturing.
At present, the founder is working on prototyping an insulin pen and simplifying it for Indian patients. “Current insulin pens are not cost-effective and people don't know about their portability. We will use the resources of local design universities and schools to design for the local market,” Ankit says.
The company plans to deploy $2 million for manufacturing, but Ankit does not want to disclose his total investment in the company.
“We have approached various doctors and look at the technical side to work out solutions, give demos, and organise roadshows,’’ Ankit says. He adds that hospitals are now looking to work with organised players.
In the pink of health
The current market size of the medical devices industry in India is estimated to be $5.2 billion as per the Department of Pharmaceuticals. The estimated retail market for medical devices is between $ 9.3 billion to $10.8 billion.
According to Invest India, the country’s medical devices industry has the potential to grow at 28 percent per annum to reach $50 billion by 2025.
The medical devices industry in India comprises large multinationals, with extensive service networks, as well as, small and medium enterprises (SMEs).
Medical devices are segregated into six major segments, of which equipment and instruments (surgical and non-surgical) form the largest portion (53 percent) of the pie in India.
There are 750–800 domestic medical device manufacturers in India, with an average investment of $2.3–2.7 million and an average turnover of $6.2–6.9 million. Around 65 percent manufacturers are mostly domestic players, operating in the consumables segment and catering to local consumption with limited exports.
The business model for Caremont is to take a commission off the distribution. When it begins manufacturing products, it will be cost plus margin, taking into account the distribution network it may set up.
The eight-member Caremont team is currently working hard with one goal in mind: building the next valuable company in India.
“We want to begin making in India by FY22 and reach revenue up to Rs 8 crore at the same time,” Ankit says.
(Edited by Teja Lele Desai)