Forus eyes services and the US for a growth spurt after making a profit selling devices

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It’s interesting to see what the first wave of profitability can do for a company’s ambitions.

Based in Bangalore Forus Health took 12 years to become profitable, with much of its revenue coming from the sale of its proprietary eye screening devices, which are among the world’s most advanced tools for detecting retinopathy in premature babies.

The company now forecasts a 500% increase in revenue over five years as it shakes up its business model, focusing on services and platforms as it prepares for aggressive expansion into the United States.

Services and platforms, deemed more favorable to investors, currently contribute around 10% to Forus’ activity. The company expects that figure to grow to 70% in five years, with key growth coming from the United States, a particularly difficult terrain for domestic medtech and biotech startups. A win there will be quite significant for India’s broader health tech sector.

Forus is also planning its fifth fundraising to drive this expansion. So far, it has only raised about $18 million since it started operations in 2010. Founder-CEO K. Chandrasekhar did not reveal how much the company plans to raise now, nor the current and expected valuation of Forus, stating only that the company would continue to be conservative in fundraising.

But the angst is evident when Chandrasekhar talks about investments. “It sometimes gets frustrating to hear that someone has raised $50 or $200 million. Because even though I have built a profitable tech product business, I have to race to raise even $2 million,” he said. “We are not respected.

It hurts (a little).

An inflection point

Forus’ plan for a big transformation hinges on it becoming a digital platform and using artificial intelligence to reach millions of people around the world, Chandrasekhar says. In this context, the company plans to invest at least 5 million dollars for its expansion in the United States over the next 2 to 3 years.

Forus first announced a subsidiary in the United States in 2016 and focused on building a network including eye care specialists, clinics and hospitals, and other stakeholders.

“Forus is one of the very few (domestic medical technology) companies to hold five U.S. patents,” says Sameer Wagle, managing director of Asian HealthCare Fund, which first invested in Forus in 2014. have been selling for five years.. And over the past 12-18 months they have been in discussions with strategists to roll out more aggressively in the US market.

The global ophthalmic devices market size is estimated at around $5 billion and is expected to grow at a compound annual growth rate of 5% through 2030, according to company projections shared by Sameer. Of this amount, the market for retinal imaging devices represents approximately $2.06 billion and is expected to grow by 5.6% through 2030.

“Forus is at an inflection point,” Sameer says, outlining what he calls the company’s three growth levers. “Its device portfolio will continue to grow, but growth will also come from the two new engines…Equipment sales will see steady growth, and we will see phenomenal growth on the services side and in the US market.”

Forus posted a profit of Rs 18.71 lakh for the 2021-22 financial year, down from a loss of Rs 1.09 crore the previous year, as revenue jumped 30% to Rs 28.11 crore . For FY 2023, the company expects revenue to climb to Rs 39.58 crore, reaching Rs 168.7 crore by FY 2027.

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Understand the blind spot

Chandrasekhar, an alumnus of BITS-Pilani and IIM-Kolkata, was previously Chief Strategy Officer at NXP Semiconductors, headquartered in the Netherlands, which spun off from Philips in 2006. engineering because I was bad at biology.” he says.

He started Forus (literally, for us, for Indians) for mass early intervention in preventable blindness after months of interactions with Dr. S. Aravind, currently Chief Medical Officer at Aravind Eye Hospital in Chennai.

The interactions were initially part of a Philips innovation initiative introducing its leaders to experts from other fields. But these continued even later as a side project with frequent weekend visits to the main facility of Aravind Eye Hospital in Madurai, prompted in part by Chandrasekhar’s affection for the city, the centuries-old Meenakshi Amman temple and the famous Murugan idlis.

As Chandrasekhar met with doctors and, more importantly, patients, he understood some of the major barriers to preventative eye care. These include a reluctance to waste hours with dilated eyes (which could rob many of a day’s worth of subsistence), and a critical shortage of ophthalmologists (one for every 70,000 in India, which has not much improved since).

And so Chandrasekhar decided to build a portable, rugged device that would capture images without dilation, as well as enable remote diagnosis (the “cloud” was not yet a popular concept).

A global solution

Forus has developed several specialized eye screening devices since; its 3nethra neo HD FA is considered one of the most advanced in the world for neonatal retinal imaging.

Retinopathy of prematurity, or RoP, is an eye disorder in babies born prematurely that can lead to severe visual impairment and even blindness, but is preventable with early detection and treatment.

By selling these devices, mainly to retina specialists and ophthalmologists, Forus has also created an ecosystem of experts that it can now use for its services and platform game.

“That’s where I see maximum growth happening. When we go directly to the consumer, the reach is much wider,” says Chandrasekhar.

Worldwide, it is estimated that at least 2.2 billion people suffer from near or far vision impairment, which could have been avoided or which has not yet been treated for around half of them. , according to the World Health Organization.

The annual global costs of lost productivity associated with uncorrected myopia and presbyopia are estimated at $244 billion and $25.4 billion, the WHO adds.

While several companies, including global brands, have started actively tackling this problem, including with affordable solutions, Forus still stands out.

“Forus has been instrumental in creating this market (for affordable retinal imaging devices),” Dr. Aravind said in a phone call. “Globally, they play a very important role. While cost (of the device) is no longer an obstacle, where Forus now has an advantage is the network effect.

Edited by Affirunisa Kankudti
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