Mumbai: Chennai-based diabetes care provider Dr Mohan’s Diabetes Specialities Centre has raised Series A funding of $10.23 million (Rs66 crore), led by impact investor Lok Capital-advised Growth Fund, its third fund.
Evolvence India Fund also participated in the round.
Venky Natarajan, managing partner, Lok Capital and Ajit Kumar, managing director, Evolvence India Fund, will join Dr. Mohan’s board. Veda Corporate Advisors was the exclusive financial adviser for the transaction.
The diabetes care chain was founded in 1991 by Padma Shri awardee Dr V. Mohan, who has worked for nearly 40 years in the field of diabetes.
“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,” said Dr Mohan, chairman of the company.
Dr Mohan’s Diabetes will use the funds to develop a pan-India presence and grow from a base of 25 clinics to 100 clinics in the next four years.
This is the first round of institutional funding for Dr. Mohan’s Diabetes since its inception in 1991
According to Dr Mohan, the company spent its first decade building a strong model, standard operating procedures and training doctors specialized in diabetes care.
“In the initial 10-12 years of the journey, we had just one centre in Chennai. Slowly as we trained more students, they started getting better and matured as doctors, we started to send them out to other cities to see if we could branch out. Then we slowly started setting up more centres as we built our bandwidth, our managerial staff, administrative staff, quality systems, labs,” said Dr. Mohan.
The plans to scale up have also been prompted by the rising prevalence of diabetes in India.
“The diabetic population in India has grown by leaps and bounds in the last 10 years. Today we have crossed 70 million people. There are many parts in India where you do not have specialized doctors to treat this,” he said.
Prevalence of diabetes in cities, above 20 years of age, is 25% and over age 50 it is more than 40%, he said. “In Tier 2 cities, it will be around 15-18%, the number is lesser, but the problem is that these cities don’t have facilities for diabetes care. So it is a huge market,” Dr Mohan added.
The company plans to expand to all main metro cities and neighbouring tier II towns.
“Till now we have mostly been a Tamil Nadu-focused chain, with a few additional centres in places such as Hyderabad. In this phase of expansion, we will be spreading out to main metros as well as tier two cities. We have entered Karnataka and Andhra Pradesh recently. We will be starting centres in Kerala too. We have also started one centre in Delhi and we are starting one in Lucknow this month,” said Dr. Mohan.
The chain currently serves around 700 patients daily. With 100 centres that number will go up to at least 2,500-3,000 patients per day, he added.
Lok Capital has invested in the diabetes chain from its third fund for which it is raising $100 million. The firm had achieved a first close of the third fund at $40.5 million in June 2016. Evolvence India Fund is sponsored by New York Life Insurance and Evolvence Capital and has committed $200 million in 15 private equity funds and also invested $150 million across 12 co-investments in India.