BVP India invests in Indian dialysis clinics
Many entrepreneurs within growth-stage firms claim to live and breathe their business propositions. One company founder, Kamah Shah, takes this adage to the next level, however, as his reliance on kidney dialysis machines sees him undergoing the treatment for six hours every night. Shah’s company, Nephroplus, which he founded alongside Vikram Vuppula in 2009, is a chain of kidney care and dialysis clinics providing services such as hemodialysis and kidney transplants to patients in six Indian states. The company, which had previously only received angel backing totaling INR25 million ($470 million), is aiming to launch 100 new kidney care clinics across the country over the next three years.
Fortunately for Nephroplus, Bessemer Venture Partners (BVP) shares this ambition, and deciding to approach Shah and Vuppula to fund the project.
Through its BVP VIII vehicle, which closed on $1.6 billion in April 2011, the venture investor has funneled INR2 billion ($37 million) into Nephroplus to build 100 dialysis clinics. Shah and Vuppula, who retain a majority stake in the company, are said to be trying to raise between $3.7 million-7.5 million in debt financing from the banks.
BPV's interest was piqued by its realization that most dialysis care is administered in hospitals which frequently aren't accessible to the 1.5-2 million people who are candidates for end-stage renal disease. While a select number of bespoke dialysis centers do exist, poor hygiene standards mean infections are worryingly common among patients. "This is disastrous for patients because those with kidney disease are on dialysis for life, or until they get a transplant," Siddharth Nautiyal, director at BVP India, tells AVCJ.
Transplants however are a costly option which few can afford. Dialysis is not cheap either - especially when considering the infinite nature of the treatments. "Each session will cost you $40 and you have to do three sessions per week," explains Nautiyal, noting that, for this reason, only about 60,000-70,000 people are currently on dialysis in India.
Providing treatment free from infection risk and reducing the cost of treatments are both issues at the forefront of Nephroplus' business strategy. The Hyderabad-based company, which already employs 25 people and runs three standalone clinics in Banjara Hills, East Marredpally and Mahabubnagar, has so far registered zero cases of infection in its two years in operation.
Furthermore, Nautiyal believes that although "the standard of care is not what it should be" in India, the company's quality of care belies its geography.
And In aiming to set up 100 new clinics over the next three years, it will allow many people who would otherwise have to travel distances to a dialysis center despite their ill health will be able to harness treatment closer to home.
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