Bengaluru based Ovum hospitals for pediatric and neonatal care which are run by Neonatal Care & Research Institute (NCRI) has raised Rs 33 crore from IL&FS Investment Managers Limited and Norwest Venture Partners. This is the largest funding by a venture capital and private equity into a hospital chain in recent times.
The venture was started by four doctor-entrepreneurs with a shop-in-shop model by offering neonatal services to several major hospitals in the city, back in 2011. Currently, it runs a paediatric and delivery hospital, started two years ago, and an IVF (in vitro fertilisation) centre. According to CEO Dr Adarsh Somashekhar – Ovum plans to use the funding to expand to three more hospitals in and around Bengaluru in the next 18 months.
Ovum earlier raised funding from primary care clinic chain Nationwide, which interestingly is also been backed by Norwest. The company has so far spent little over Rs 13 crore on the two centres, from the funds raised as well as through loans. Ovum offers slightly lower cost packages compared to competitors such as CloudNine and Cradle, which are targeted at more upper middle class segments.
Dr Praveen Venkatagiri, co-founder and head of neonatal network, said the company will be able to afford the price differential by spending less on ambience and choosing localities where its competitors are not present so far. Dr Venkatagiri claims that Ovum currently has a revenue run rate of Rs 18 crore and they expect it to be somewhere aaround Rs 24 crore in the next 8 months.
Mohan Kumar, partner at Norwest says:
“Like most other healthcare segments, maternity and neonatal care segment has so far been driven by nursing homes or clinics run by a single doctor. But that generation is going away, and with migratory populations, are giving way to chains like these. The segment which Ovum is targeting, the middle and lower middle class, is also the largest market,”
At present around 80 deliveries happen per month and the figure is expected to reach 400 after the new hospitals are functional.