A visit to the dentist doesn’t always evoke a happy response. Dental procedures are painful, time consuming and expensive. You don’t want to go unless you are in unbearable pain and the annual check-ups are almost never done.
You can’t blame the dentists – exorbitant cost for dental treatment is a result of high cost of setting up a clinic. A high-end dental chair today costs about Rs. 6 lakh. Then, there is the cost of real estate which again is very expensive in India. Like any other medical set up, a dental clinic too takes its own sweet time to get established and bring in a steady flow of patients. Given its high costs and low asset utlisation, setting up a dental clinic is not the most lucrative business.
Dr. Devaiah Mapangada set up his dental practice with a single dental chair back in 1993 for Rs. 9 lakh in Brigade Road, at the heart of Bengaluru city. He ran a reasonably successful practice, but in his quest for furthering his professional edge, he moved to Zurich, Switzerland to attend a fellowship programme for a year and a half. One of the topics he was dealing with as part of the programme was the delivery of dental care at homes.
However, even in Europe at the time technology was still catching up, even though the need for such a service was pronounced. When he came back to India upbeat about servicing the home-segment, he realised the market wasn’t ripe yet, so he settled down with his conventional practice once again. By 2008, he started sensing the winds of change.
Many of Mapangada’s patients included senior citizens who often called him to their homes for treatments. “Some of them were over 90 years old,” says Mapangada. As Bengaluru was growing, some of his patients dispersed throughout the city. And their need for his services spurred him to think about delivering dental care to people’s homes seriously.
By July 2011, he had his first mobile unit ready in the form of a bus, MobiDent. After spending Rs.40 lakh on it, the bus had all the required amenities—two chairs for treatment, clinical devices, a waiting room with a TV, and a generator. Mapangada immersed himself in his work and in the next few months, he went on to treat a few thousand people. Instead of individual homes, which were working out to be an expensive proposition, MobiDent tied up with corporate entities. His business model was simple. MobiDent would go to corporate houses and provide free check-ups for its employees. If they found that a treatment was required, they would suggest the same to the employee. In case they were willing to go ahead with the treatment, the firm would do it – in the bus, of course, – at a price 30-40% lower than the traditional dental clinics. Things were going well and the numbers reflected that. Till mid-2012, his small team had managed a whopping 8,000 check-ups and 3,750 treatments at an average ticket size of Rs. 650. By the end of 2014, he had 80 companies as clients and 17000 patients. Yet, he wasn’t particularly happy.
The turning point
“There were 500 employees in that firm on the 12th floor. Yet, only 10 or so came down to our bus for a dental check-up,” explains Mapangada. People were not ready to walk even half a mile down the building to the place where his bus was parked. He knew he needed a solution for this. “That was what put me on a new course of thought,” says Mapangada.
His friend and eventual co-founder, Vivek Madappa told him just one thing —“You need to find a way around to reach that 12th floor.” That’s what Mapangada ultimately did. He found his way up the multi-storeyed buildings. Mapangada and Madappa were acquaintances and the dentist was aware of the latter’s entrepreneurial skills. “Vivek’s twin brother and I were friends. So I knew him earlier on,” says Mapangada.
Madappa came from a management background, had an engineering degree and was well-versed in setting up new ventures. He had worked with various institutions, where he looked at marketing and brand building. By the winter of 2003, he had quit his job and started consulting with various companies to figure out what he wanted to do. Madappa saw the potential in Mapangada’s business and told him that the model needed to be shifted from mobility to portability and the target needed to be the whole family instead of just one patient. Mapangada took the suggestion and spent the next few months figuring out how to make things portable. Dental machines are not exactly compact and are usually intimidating and expensive. He went back to the person who had built him his mobile unit and told him what he wanted. By January 2014, the first portable unit was ready. The chairs in the unit could be carried to office floors along with other units such as toolkits, material bags, and spittoons. The entire kit together weighed close to 60 kilos with the chair itself weighing 25 kilos. A team of three including the dentist would carry the unit to the floors where it could be set up.
In July 2014, the duo registered a firm named Doux Dentistry and the brand MobiDent was moved to the new firm. Soon, MobiDent realised the importance of reducing the bulkiness of its portable units. The kits were made even more compact and the weight of the chair was reduced to 12 kilograms. The first portable unit was set up for Rs.1.75 lakh, however the cost was later brought down to Rs. 65,000. Each doctor is given a kit. The kit has instruments and equipment required for basic procedures such as deep cleaning, plaque and tatar removal and polishing and a portable dental chair which can be taken anywhere in a car or cab. The founders call it the ‘taxi model’. For more complex treatments, the firm has vans with x-ray machines, air compressors and consumables. The customised vans cost around Rs. 3.75-4 lakh. In Bengaluru alone, they have 38 kits and six vans.
Casting the net wider
MobiDent did not limit itself to individuals. Madappa had been in talks with a couple of hospitals and learnt that there were instances when a hospital room would remain vacant for a few hours. It occurred to him that MobiDent could offer free check-ups to patients visiting the hospital by utilising the space.
Madappa started pitching the idea to several hospitals. Columbia Asia Referral Hospital in Bengaluru finally decided to try it out. So MobiDent set up their portable unit inside their hospital providing free check-ups to patients who visited the hospital. Those who needed treatment were charged accordingly and 20% of this revenue was shared with the hospital. In real quick time, the firm had treated over 300 patients, working in flexible slots of 7 am to 10 am and 3 pm to 6 pm. Seven hospitals of Columbia Asia soon signed up with the start-up.
By May 2015, MobiDent had expanded its presence to three more hospitals and was eyeing its entry into Pune. “We literally airlifted our portable units to Pune, set them up early in the morning, and were ready even before the people arrived. When they saw how we worked, they were impressed,” says Mapangada. In a month’s time, the firm was already operating its units out of the Sahyadri chain of hospitals in Pune. Later, Cloud9 hospitals also came on board.
In November that year, MobiDent entered Ahmedabad, and soon thereafter, into Mysuru. Each city has a branch office with a marketing and sales team, support team for logistics, and doctors. The team has also built a technology platform in-house that enables real-time monitoring of doctors, support staff, operations, customer care, and logistics.
“Our business model allows us to break even in the first month and have payback of less than three months. So, we are able to self-fund most of our growth,” says Madappa. By this time, the firm, which started with an initial investment of Rs.10 lakh from the founders in 2014, also got its first round of funding from a group of angel investors to the tune of Rs.1.25 crore. “A critical component of the ‘IP’ in this business was getting the design of the dental kit and the chair right. The company has gone through several iterations and come up with a design and solution that is working very well. Also, the company’s strategy of tying up with hospitals has helped establish credibility around its brand as a service provider,” says Chaitanya Deshpande, Former M&A head at Marico and an angel investor. “They run a tight ship and even at this early stage, do not burn cash on regular operations. I believe the company is very well poised to move into its next phase.”
As they were expanding operations, to ensure standardisation of services the firm started the MobiDent Academy for Dental Excellence. At the academy, the hired doctors are given training in dental skills, grooming and presentation, and communication skills. Every doctor needed to finish 2,500 procedures before he or she could go for home services. The company prefers to expand its operations on its own rather than depend on franchisees. “We don’t want to go down the franchisee route as we feel that might dilute the quality of the services offered,” says Madappa.
Till date, they have treated over 51,000 patients with a 65% repeat rate and have 20 hospitals on board. The average treatment cost is Rs.1,100 and the patient records are maintained with software developed in-house. The company currently has 15 dental hygienists and 36 dentists — 22 in Bengaluru and 14 spread across Pune, Ahmedabad, Mysuru, and even in Kenya.
The company added a third vertical to its business when they started providing dental services to homes. One of their key attractions is that the entire family can sign up for an annual healthy teeth membership. Under the scheme, members of a family receive services like deep cleaning, plaque and tartar removal, twice a year. An annual family membership costs Rs. 2,750. So far, 370 families in Bengaluru have signed up. “By June we will be launching the service in Chennai, Hyderabad, Mumbai, and Delhi,” says Madappa. “In the mornings, we cater to corporates and hospitals. In the evenings and weekends, we have our house visits. This routine keeps our capacity utilisation very high,” adds Madappa. That’s the reason why MobiDent’s model works because not only do they keep the costs low but they ensure the asset utilisation is high. For instance, in the past one year, the taxi model has treated more than 26,000 patients which is significantly higher than 17,000 patients they treated in the three years when they had the mobile bus. The numbers that MobiDent clocked in one year with its taxi model, traditional clinics take about ten years to achieve. What makes the model even more attractive is the fact that while it costs around Rs.15 lakh to set up a clinic and the mobile bus which had two chairs cost Rs.40 lakh, a single chair under the taxi model only costs Rs. 65,000. The vans come at an additional cost of Rs. 3.75 to 4 lakh.
Thanks to their growing customer base, the company revenues have seen a significant jump from Rs. 37 lakh in 2014-15 to Rs.1.26 crore in FY16. While 60% of the revenues come from hospitals, 30% come from corporates, and 10% from homes. According to Madappa, FY17 will prove to be even better for the company, with revenues of Rs. 2.25 crore.
Their growth has definitely caught the attention of investors. In August 2016, the Centre for Innovation, Incubation and Entrepreneurship (CIIE) at IIM Ahmedabad invested in MobiDent. In December 2016, the company raised a pre-Series A funding of $250,000 from New York-based DanGold Investment Corp. Vipul Patel, VP-investments, CIIE-IIM Ahmedabad believes it’s a first-of-its-kind model with 1/10th the cost of setting up a new clinic. “With MobiDent, CIIE hopes to test the waters in the homecare innovation space and foray into more asset-light models that address key barriers in making healthcare ubiquitous,” he adds.
MobiDent is now eyeing international markets as well. It has set up its first international centre in Nairobi, Kenya to see if their model works in overseas markets. “We launched our services in Kenya towards the end of October and have already started receiving some good traction,” Mapangada says. The team is now receiving inquiries from China, Nepal, and Malaysia.
With the recently raised money, the firm is eyeing further expansion into 20 major cities, aiming at having 300 more dentists across the country, and strengthening its technology and marketing teams by the end of 2017. The long-term plan is to become the biggest dental chain across India, Africa, and South Asia in the next three years. Going by the initial response to their offering, Mapangada and Madappa are confident they are well on their way to get there.