Consulting
9B20M072
DOC32: TRANSFORMING DENTAL HEALTH CARE THROUGH TECHNOLOGY
Saurabh Kumar wrote this case solely to provide material for class discussion. The author does not intend to illustrate either effective or ineffective handling of a managerial situation. The author may have disguised certain names and other identifying information to protect confidentiality. This publication may not be transmitted, photocopied, digitized, or otherwise reproduced in any form or by any means without the permission of the copyright holder. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Business School, Western University, London, Ontario, Canada, N6G 0N1; (t) 519.661.3208; (e) cases@ivey.ca; www.iveycases.com. Our goal is to publish materials of the highest quality; submit any errata to publishcases@ivey.ca. i1v2e5y5pubs Copyright © 2020, Ivey Business School Foundation Version: 2020-04-17
On October 15, 2019, the Doc32 office was celebrating its achievement of its month-end revenue goals. Doc32 was an online management and marketing platform for dental health care based in Pune, Maharashtra, India. The company was dedicated to helping its partner dentists find clients and reduce their operational costs. The Doc32 platform provided optimized solutions, innovative marketing techniques, and dentistry supplies at a discounted rate. The Doc32 founders had been pleased with the online platform’s success to date and saw it as validation of their chosen business model. However, Doc32’s co-founder and chief executive officer Hitesh Kakrani wondered how he could replicate that success across the entire country. What growth strategies could the new venture adopt to achieve its goals for growth, diversification, product development, market penetration, and market development? BACKGROUND Kakrani received a Master of Business Administration degree from a premier business school in India before settling into a position with the multinational consumer goods giant Procter & Gamble. A short time later, his brother, Jatin Kakrani, completed his dentistry studies and began setting up a dental care practice in Indore, which made the two brothers aware of challenges facing India’s dental care industry. The brothers realized that the country’s dental care services were highly fragmented and in great need of becoming organized; thus, they began working on an idea to develop the required measures to establish and grow a dental practice. After much research and deliberation, the brothers decided that expert use of technology and management paradigms could help optimize costs and streamline back-end processes. The need to optimize operational efficiency and cater to the needs of patients led them to design their ideal technology framework for solving dental health care problems. India’s dental care market lacked standard pricing and quality service delivery, among other issues. The highly fragmented industry was characterized by a surplus of dentists. Approximately 300,000 dentists flooded a market that was estimated to require only 180,000.1 The Kakrani brothers concluded that to bring
1 “Dentist Surplus Forces Freeze on New Colleges in India,” Times of India, accessed November 12, 2019, https://timesofindia.indiatimes.com/home/education/news/Dentist-surplus-forces-freeze-on-new-colleges-in-India/ articleshow/ 52317522.cms.
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Page 2 9B20M072 about some structure to India’s dental care industry, a technology-based solution was needed. The right framework would reduce operational costs for dentists, ensuring more standardized treatment methods for dentists, and provide better post-treatment care for their patients. Motivated by the prospect of contributing to society, the brothers set off to explore solutions with limited capital investment. After becoming confident in the Doc32 model, Hitesh left his position at Procter & Gamble to work full time on the new venture. With the right blend of expertise in both dentistry and marketing management, the brothers built a strong team led by experienced computer science engineers. The first version of the online platform was ready in April 2017. Soon after that, Avi Ramavat, a dental practitioner with over 10 years of dental care experience, joined the brothers as a third co-founder. The three founders named their new venture Doc32. At first, Doc32 operated as a dental care aggregation platform that served the needs of all customers. The plan was to create a technology-based online ecosystem to help new dentistry graduates and novice dentists manage and grow their practices. The three entrepreneurs were inspired for their own venture by the Association of Dental Support Organizations, a US online dental services platform.2 Doc32 operated as a software as a service tool that connected dentistry patients with practitioners to resolve dental health care issues. The company initially provided its services to consumers in the Indian cities of Indore and Pune, where the venture set up its headquarters. Doc32’s vision was to provide the best possible dental health care at reasonable prices by using technology, transparency, and teamwork as the company’s three pillars of business. The business was founded as a subsidiary company of Abita Innovations Private Limited. The parent company’s vision was to empower all doctors to improve their business performance and effectiveness through the expert use of technology and global collaborations. CURRENT DENTAL HEALTH CARE MARKET AND POTENTIAL IN INDIA India’s dental health care industry was a highly fragmented and untapped market, with almost 95 per cent of all dental clinics individually owned. Overall, the dental health care market was valued at approximately US$2 billion in revenue in 2017, with the potential of reaching $10 billion and a compounded annual growth rate of 20 per cent.3 The cosmetic dentistry segment was a major contributor to total dental health care revenue and was expected to experience significant growth between 2019 and 2025.4 Other significant contributors in the industry included curative dentistry services, such as root canal diagnoses, dental crowns and bridges, and dental implant services (see Exhibit 1). The high volume of individual dental services offered in India compared to the limited consumer base created a great deal of competition. Many dental practitioners were not well trained or experienced at managing complicated back-end operations to optimize clinic operations.5 Operating expenses in dentistry were also generally very high. This created a gap in the market for a technology-enabled solution, which Doc32 provided (see Exhibit 2; for Doc32’s expenses, see Exhibit 3).
2 “About the ADSO,” Association of Dental Support Organizations, accessed March 2, 2020, www.theadso.org/about-the-adso. 3 Shahid Akhter, “India Is One of the Fastest Growing Dental Markets: Dr. Ratnadeep Patil,” Times of India, November 13, 2017, accessed January 6, 2020, https://health.economictimes.indiatimes.com/news/industry/india-is-one-of-the-fastest- growing-dental-markets-dr-ratnadeep-patil/61622072. 4 “Cosmetic Dentistry Market Size, Industry Analysis Report, Regional Outlook, Application Potential, Price Trends, Competitive Market Share & Forecast, 2019–2025,” Global Market Insights, accessed January 6, 2020, www.gminsights.com/industry-analysis/cosmetic-dentistry-market. 5 “Medical PG Exam Preparation Online: The Imbalance of Dentist–Patient Population Ratio!!!” Medical PG Exam Preparation Online, May 31, 2017, accessed December 24, 2019, https://medical.prepladder.com/dental/721-the-imbalance-of-dentist- patient-population-ratio.html.
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Page 3 9B20M072 Hitesh felt that many dentistry patients in India were generally uninformed about dental health care. Therefore, he felt that they had trouble finding the right practitioner for their particular need and would often be subject to inflated pricing, varying quality of service, and multiple unnecessary clinic visits. KEY FEATURES OF DOC32 Doc32 operated as an Internet-based service that connected dental health care patients with dental practitioners. The online platform integrated the entire value chain on a proprietary technology-based ecosystem and helped consumers find a suitable dental service at an affordable price, fronted by a simple user interface (see Exhibit 4). Doc32’s partner dental practitioners were certified professionals with more than five years of experience. Their academic and professional credentials were verified before they were listed on the Doc32 platform. They were expected to meet appropriate standards, including thorough sterilization of all medical equipment and provision of up-to-date technology such as digital x-ray equipment and diode lasers for the detection of cavities. Doc32 also added a clinic management system that facilitated the maintenance of electronic records and a report management system that standardized treatment procedures and automated post-treatment care coordination. Doc32 partner clinics performed a dental health analysis before and after the patient’s treatment and provided detailed post-procedural care, follow-up, and feedback. The company involved professionals from various dentistry areas to help meet patient needs and deliver appropriate dental health care at reasonable prices. Patients and dental practitioners were provided with separate login credentials to access specific services on the Doc32 platform. For example, patients could access dental score details, whereas dentists could access inventory management information. Dental Patient Module The Doc32 platform included various features specifically designed to address the needs of patients, including online consultations, profile management, appointment bookings, patient follow-up, health scorecards, promotions and offers, and blog posts. Free Online Consultation Doc32 provided free consultations for patients with dental practitioners. These consultations could take place over the telephone or online using the Doc32 platform, with minimal waiting time of as little as two to five minutes. Profile Management Patients could access the Doc32 online platform by using the Doc32 digital application or the website. The registration process was simple, requiring only basic personal details such as the person’s name, telephone number, and address. The platform’s advanced login authentication protected patient information and prevented abuse of the profile feature. Patients could later add more personal and medical details to their profiles as needed, which could help to more accurately locate the right practitioner. Doc32’s algorithm technology would then use the entered information to match the patient’s needs with the most qualified dentist.
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Page 4 9B20M072 Appointment Booking Patients were able to book an appointment directly on the Doc32 platform. However, before choosing to book an appointment, patients could complete a questionnaire based on their dental health care issues to help determine the severity of the problem and whether assistance from a professional was required. Based on the patient’s information, various causes, symptoms, treatments, and preventative measures were provided. If the patient chose to contact a practitioner, the dentist’s availability and consultation fees would be provided, and the patient could proceed to schedule an appointment. Doc32 could arrange for treatment at the doctor’s clinic or even, for an additional fee, at the patient’s home. Patient Follow-up The patient could communicate online with the dental practitioner to resolve any outstanding queries before and after receiving treatment. A detailed report and summary of the treatment would be posted on the platform for the patient’s review, along with any food, medicine, and lifestyle recommendations. The patient could then rate the experience to help other patients in their selection of the right practitioner. Patients could access their prescriptions and appointment history on the platform, which included the dentist’s name, clinic, date, summary, and feedback. Patients could easily schedule another appointment in the future using the information stored on the Doc32 platform. Health Scorecard Patients received a personal health scorecard that summarized their oral health on a scale of 1 to 10. Specific details included number and condition of teeth, oral hygiene, periodontal status, tooth wear, dental decay, and the presence of infection. Each patient’s score card was updated regularly and remained available on the website. Promotions and Offers Doc32 provided discounts to patients who used Doc32’s services and dentistry partners for treatment. Loyal customers could receive up to 40 per cent discounts based on recent uses, frequency, and monetary factors, with higher discounts for the most loyal consumers. Patients could also receive benefits such as free quarterly check-ups and consultations, personalized dental care kits, and additional discounts throughout the year. Blog Posts Doc32 made available a blog for patients to read informative posts on dental health. Patients were also encouraged to contribute their own feedback and interact with Doc32 on social media platforms such as Facebook, Instagram, and LinkedIn. Dental Practitioner Module Doc32 also provided various features to help dental practitioners manage their appointments, inventory, and patient records.
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Page 5 9B20M072 Dentist’s Dashboard Dentists could quickly review upcoming appointments, current and previous patient information, inventory status, and pending laboratory work from their dashboard (i.e., home page). Patient information was easy to rearrange by date and time. Dentists could also access their prescription books based on the patient’s name. Doc32 customer care information was also easily reachable. Dentist and Clinic Profile Doc32 helped dentists maintain their own and their clinic’s profiles with details such as their name, photograph, qualifications, specialization, experience, registration number, address, telephone number, awards, certifications, and courses. Managing Inventory Dentists could view their inventory management system for both their dental materials and their laboratory work. Through this system, dentists could place new orders as required. Inventory information was easy to rearrange by product name, brand, quantity, remarks, discounts, or other details. Dentists could also track and check the status of purchase orders and payments. Managing Patients Doc32 allowed dentists to easily manage and view their patient information by identification number, name, telephone number, email, date of treatment, notes (if any), and treatment invoice. Dentists could also easily add new patient details into the system. Managing Treatment, Medicines, and Schedules Doc32 allowed dentists to enter, edit, or remove treatment procedures and relevant pricing. They could also add or remove details such as medicine name, dosage, duration, and frequency. Additionally, dentists could use the system to manage their own schedules by entering and updating their availability and time away from the clinic. Managing Reports Doc32 allowed dentists to manage their clinics or businesses and issue relevant reports. The reports were prepared in tabular format and could be easily arranged by date, patient details, or fees. Dentists could also print the customized reports for their needs. Managing Blogs Doc32 provided blogs for the information of both patients and dentists. Dentists would write and submit new posts on various categories, including dental care treatments, dental hygiene, and dental cosmetics, with images added for a better understanding of medical procedures. Blog posts were written by all dentists and available for viewing, but each dentist could only edit or remove their own blog entries.
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Page 6 9B20M072 Miscellaneous Features Doc32 provided other general features for dentists, such as the ability to add a guest doctor, which was a common occurrence. Guest doctors specialized in a particular type of treatment and charged a fee for each type of work they provided. Doc32 also provided training videos on relevant dental health care services. ROLE OF TECHNOLOGY The application of scientific knowledge to the practical aims of human life involved mental conceptions and innovative ideas. It was based on using accepted principles toward the skilful production of tools, the efficient use of materials, and the development of a robust ecosystem that would empower the dexterity of medical professionals. The introduction of advanced technologies, such as intraoral dental scanners and 3D printers, as well as innovative treatments such as invisible braces, helped to significantly improve the dentistry profession in terms of diagnostic precision, outcome control, and supply integrations. These technologies also facilitated the monitoring and seamless integration of dental professionals with laboratories. Widespread use of digital applications and smart phones promoted direct customer engagement for digital check-ups and cosmetic treatment. Overall, technology played an important role in advancing the dental health care industry. INDIAN MEDICAL TREATMENT INDUSTRY Three major types of medical treatment were common in India’s medical industry: allopathy, Ayurveda, and homeopathy.6 Allopathy was essentially a Western therapy widely used across the world, mainly for its effectiveness during emergencies. This drug-based methodology relied on three parameters: hypothesis, experimentation, and experiment results. Allopathy placed more attention on the process of relieving symptoms than on the cause of the symptoms. Doctors would prescribe medicine based on the symptoms demonstrated by the patient. However, allopathy generally offered only a partial cure, and most allopathic medication caused various side effects, which was considered a significant disadvantage.7 Ayurveda, a thoroughly Indian practice, was based on treatment through the supplementing of natural sources, which could take some time to yield results. Traditional Ayurveda treatments included Navarakizhi, Ayurvedic face massage, Shirodhara, Ayurvedic head massage, Gree vasti, and Janu vasthi.8 Ayurveda treatment theory claimed that the substances could have a curative effect even when given in dilute quantities.9 Homoeopathy targeted the root cause of the ailment and used minimal doses of potential substances to stimulate the immune system. The belief was that the patient would then heal naturally, and the goal was
6 B. Ravishankar and V. J. Shukla, “Indian Systems of Medicine: A Brief Profile,” African Journal of Traditional, Complementary and Alternative Medicines 4, no. 3 (2007): 319–337. 7 Nikitha Abraham, Neethu Krishnan, and Anjana Raj, “Management of Psoriasis-Ayurveda and Allopathy-A Review,” International Journal of Dermatology and Clinical Research 5, no. 1 (2019): 18–23. 8 “Indian Systems of Medicine and Homoeopathy,” Planning Commission, Government of India, accessed November 12, 2019, https://niti.gov.in/planningcommission.gov.in/docs/plans/planrel/fiveyr/10th/volume2/v2_ch2_9.pdf. 9 Syal Kumar, Gustav J. Dobos, and Thomas Rampp, “The Significance of Ayurvedic Medicinal Plants,” Journal of Evidence- Based Complementary & Alternative Medicine 22, no. 3 (2017): 494–501, accessed December 24, 2019, www.ncbi.nlm.nih.gov/pmc/articles/PMC5871155.
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Page 7 9B20M072 to cure the patient completely. Most importantly, homoeopathic medicines claimed to not have side effects and to be generally non-toxic.10 In addition to following a specific type of treatment, medical professionals specialized in each significant part of the human body. For example, ophthalmologists worked with patients who suffered from issues related to the eyes, such as cataracts, macular degeneration, or glaucoma. Orthopedics focused on patients with musculoskeletal conditions, such as bone fractures, infections, and metabolic issues. Cardiologists specialized in the research and treatment of the heart and the various diseases associated with it. These were only three of many examples. In fact, there were numerous specific and unique specializations in a medical professional’s work. Dental treatment belonged primarily to the allopathy area of medical treatment. Therefore, most procedures were carried out using drugs to treat and/or cure specific dental problems. ADVANTAGES OF DOC32 IN DENTAL HEALTH CARE Doc32 partnered with various clinics in each city in which it conducted business. The clinics were selected based on predefined criteria. Doc32 used its technology ecosystem to standardize and curate the service to the partner clinics. It also aggregated and optimized clinic supplies (e.g., dental materials and laboratory processes) for all partner clinics. The clinics were listed on the Doc32 platform, which charged a service fee per month or per patient. Doc32’s technology ecosystem provided advantages for both the dentists and the patients. Dentists could save 20–30 per cent of their operational costs thanks to more productive practice hours. Doc32 also helped them save up to 20 per cent with automation, aggregated purchases, and shared resources. This helped improve the dentists’ efficiency, enabling them to deliver excellent and standardized services to their patients. Doc32 also helped reduce routine administrative tasks and paperwork for the dentists. Patients could benefit from a one-stop solution for all their dental health care needs. Doc32 provided patients with quality service in a conveniently located network of clinics within their vicinity. Patients could receive a variety of dental treatments, including root canal therapy, dental implant fixing, wisdom tooth extraction, and oral cancer screening at any of the partner clinics. DOC32 REVENUE MODEL The revenue model of Doc32 consisted of two different streams: revenue generation from the patient or consumer and revenue generation from the partner clinics (for Doc32’s full financial and revenue details, see Exhibits 5 and 6). Revenue from patients included diagnosis fees and various direct-to-consumer product and service subscriptions. Long-term revenue could also be derived from research analytics on patient data. Revenue from partner dentists was generated mainly from the company’s margins on clinic parts and supplies, as well as from subscription fees. Long-term revenue could also be derived through research analytics on service patterns of the dentists. According to Doc32’s revenue breakdown, 57 per cent of revenue came from partnership fees, 29 per cent from supply margins on clinic parts and supplies, and 14 per cent from consumer subscriptions and products (see Exhibit 7).
10 Planning Commission, Government of India, op. cit.
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Page 8 9B20M072 COMPETITORS Practo For its planning and design, Doc32 used models such as the US Association of Dental Service Organizations; various European platforms such as Heartland Dental, Aspen Dental, and My Dentist; and various technology- based start-ups such as Smile Direct Club, Toothpic, Carestack, and Candid. Among Doc32’s competitors in India, Practo was the most significant medical care service provider, with a 90 per cent share of the market. Practo was a one-stop centre for all diagnostic and pharmacy needs, and it operated in various medical domains. Covering over 100 cities across India, it offered treatment in all major categories, including allopathy, Ayurveda, homeopathy, and other alternatives. Like Doc32, Practo provided online appointment booking based on the health problem, clinic name, doctor name, or geographical area. Additionally, it provided online chats with doctors, health records storage, and physical check-up packages to patients. Practo was active on various social media platforms. Its website featured an effective user interface and secure applications. It also boasted excellent customer care services and a guaranteed refund policy.11 Practo’s variety of services included guaranteed instant appointments with doctors and friendly reminders for medicines, drinking enough water, and taking breaks from work. Practo also arranged laboratory tests, provided reliable and quick home delivery of medicines, and featured a wide range of health products for family care, skin care, fitness, hair care, lip care, sexual wellness, women’s needs, and baby products sourced from a trusted network of verified pharmacies and medical stores. Practo provided comprehensive information about medicines written by verified medical experts and lists of recommended products for consumers. It also delivered an optimized solution for various health care providers such as doctors, clinics, and hospitals. Its advertising campaign Practo Reach allowed clinics and hospitals high visibility on the Practo website. Other options allowed doctors to improve their online profiles and helped them monitor patient feedback. Practo’s specialized practice management software for clinics and hospitals provided premium access to an all-in-one tool for health providers to improve their online visibility, enhance their practice’s management, and offer a greater patient experience.12 Other competitors included various dental services chains such as Clove Dental across India and Sabka Dentist in Mumbai, Pune, Gujarat, and Bangalore. Several online listing platforms, such as Just Dial and Lybrate, also operated in this industry. Each service offered several distinguishing features. For example, Sabka Dentist allowed equal monthly instalments for treatment costs, which attracted many patients who were otherwise unable to afford medical costs (see Exhibit 8). COMPETITIVE ADVANTAGE Doc32 differentiated itself from Practo by remaining focused on the dentistry market, going beyond helping patients find a dentist to locating the right specialist for their specific dental health concern within a distance of only 1.5 kilometres. Doc32 made skilful use of technology and worked with experts from all relevant disciplines of dentistry to ensure a clear understanding of patient needs, and to deliver a satisfactory experience to all patients (see Exhibit 8). Doc32 focused on delivering a curated experience through partner dentists, using an innovative operational model that leveraged the market scenario and technology in dentistry. It focused on continuous engagement with consumers, supply vendor collaborations, and ownership of the patient data to create a distinct barrier
11 “We Are a Bridge,” Practo, accessed November 12, 2019, www.practo.com/company/about. 12 Ibid.
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Page 9 9B20M072 for new market entrants. It created a complex, holistic, software-as-a-service product, available with an integrated dental score, digital patient counselling, real-time management, and clinic monitoring. It also had diagnostic hardware and vendor system integration in place, in addition to exclusive supplier partnerships. MARKET GROWTH AND FUTURE POTENTIAL With overall growth in the health care industry, the dental care services market was expected to reach $629.3 billion by 2022, from $436.2 billion in 2018, with a compound annual growth rate of 9.6 per cent. The most significant incremental share in the market was expected from the dental cosmetic industry.13 Doc32 had the potential to make a strong mark in the industry and provide quality medical care to patients in remote areas of India at an affordable price. However, Doc32 was facing various revenue issues. Regarding revenue generated from partner dentists (e.g., subscription fees), Doc32 had to consider the limited market potential. In 2020, the overall market size for clinic supplies was projected at only ₹4514 billion.15 With limitations from choosing only quality clinics and from geographical restrictions, Doc32 was likely only able to profit from up to 5 per cent of the market (i.e., from a ₹2.25 billion share). Regarding revenue generated from patients, Doc32 received a small percentage from each dental practitioner’s income. However, with high customer acquisition costs of ₹2,200 per new customer, and average dental treatment revenue of ₹5,000 per patient, Doc32 was earning only ₹500 to ₹600 per patient but spending ₹2,200 per new customer. To overcome these revenue problems, Doc32 was contemplating several options: to diversify to other medical treatment categories (e.g., homeopathy and Ayurveda), to add a product and subscription approach, to acquire dental care products for sale to clinics on a subscription basis to improve the loan-to-value ratio, or to add a new platform as a separate software-as-a-service offering for all clinics, but without quality assurance, to reach nearly all clinics rather than only up to 5 per cent. Hitesh wondered which growth strategies would best enable Doc32 to achieve its goals.
13 “Dental Services Market,” The Business Research Company, accessed December 24, 2019, www.thebusinessresearchcompany.com/report/dental-services-market. 14 ₹ = INR = Indian rupee; US$1 = ₹70.29 on October 15, 2019. 15 The Business Research Company, op. cit.
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EXHIBIT 1: COMPANY’S ESTIMATES OF INDIA’S DENTAL HEALTH CARE MARKET POTENTIAL
Source: Company documents.
EXHIBIT 2: NUMBER OF DENTISTS IN INDIA COMPARED TO CONSUMER NEED
Note: No. = number. Source: Sankalp Yadav, and Gautam Rawal, "The current status of dental graduates in India," The Pan African Medical Journal 23, no. 1 (2016) accessed December 24, 2019, www.ncbi.nlm.nih.gov/pmc/articles/pmc4856508.
660
2200
5100
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
2009 2018 2023
India Dental Care Market (in US$ Million)
50%
11% 15%
24%
0%
10%
20%
30%
40%
50%
60%
Dental Consumables
Dental Implants
Dental Imaging
Chair & Equipment
Dental Clinic Supplies by Category
0
0.5
1
1.5
2
2.5
3
3.5
4
2010 2014 2018 2022
V a
lu e s (
in 1
0 0
,0 0 0
's )
No. of Dentists Requirement A
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EXHIBIT 3: COMPANY EXPENSES (IN ₹)
December 2018
January 2019
February 2019
March 2019
April 2019
May 2019
June 2019
July 2019
August 2019
September 2019
October 2019
1. Marketing/ Outreach Total Expenses
26,046 13,147 20,894 69,682 71,525 148,522 173,628 198,630 166,522 242,028 216,630
1(a) Advertisement 10,512 13,147 20,894 25,013 30,251 119,002 122,958 160,002 137,002 191,358 196,002 1(b) Dental Services - - - - 25,758 29,520 50,670 38,628 29,520 50,670 20,628 1(c) Dentist Acquisition 15,534 - - 44,669 15,516 - - - - - - 1(d) Dental Products - - - - - - - - - - - 2. Team & Salary Expenses
307,440 428,040 398,880 434,880 472,680 475,092 432,180 396,990 386,064 357,732 231,084
3. Office & Other Expenses (Total)
94,480 84,078 96,948 87,205 87,048 89,748 126,756 126,738 137,664 118,188 120,816
3(a) Office Expenses 24,300 24,300 24,300 24,300 24,300 24,300 48,600 48,600 48,600 48,600 48,600 3(b)Rent 24,633 10,008 21,024 29,534 17,370 15,552 20,772 16,182 24,858 17,604 26,172 3(c) Travel 38,617 22,320 40,572 19,960 24,228 25,704 30,852 35,424 35,172 25,452 20,052 3(d) Misc. - - 2,016 4,374 12,114 15,156 16,236 16,236 18,738 16,236 15,696 3(e) Courier & Sampling 6,120 6,120 6,120 6,120 6,120 6,120 7,380 7,380 7,380 7,380 7,380 3(f) Office Maintenance - 2,106 2,106 2,106 2,106 2,106 2,106 2,106 2,106 2,106 2,106 3(g) Subscriptions 810 19,224 810 810 810 810 810 810 810 810 810
Note: ₹ = INR = Indian rupee. Source: Company documents.
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EXHIBIT 4: DOC32 INTERACTIVE INTERFACE
Source: Company documents.
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EXHIBIT 5: COMPANY FINANCIALS (IN ₹)
December 2018
January 2019
February 2019
March 2019
April 2019
May 2019
June 2019
July 2019
August 2019
September 2019
October 2019
Total Revenue 161,568 245,304 394,074 601,394 695,178 1,196,618 2,202,167 2,732,413 3,038,598 3,176,802 3,675,240
Total Gross Margin
38,776 53,801 72,378 101,304 134,881 232,391 331,945 407,810 511,495 555,196 583,524
Total Gross Margin %
43% 39% 33% 30% 35% 35% 27% 27% 30% 31% 29%
Total Expenses
427,966 525,265 516,722 591,766 631,253 713,362 732,564 722,358 690,250 717,948 568,530
Total Marketing Expenses
26,046 13,147 20,894 69,682 71,525 148,522 173,628 198,630 166,522 242,028 216,630
Total Operating Expenses
401,920 512,118 495,828 522,085 559,728 564,840 558,936 523,728 523,728 475,920 351,900
Net Burn* 389,190 471,464 444,345 490,462 496,372 480,971 400,619 314,548 178,754 162,752 (14,994)
Assets (Laptops, HP Tabs, & Rental Deposits)
70,128 268,128 358,128 358,128 358,128 358,128 358,128 402,300 ,02,300 402,300 402,300
Assets Purchased
70,128 198,000 90,000 - - - - 44,172 - - -
Ready Goods & Products Inventory
- - 92,635 206,114 335,664 648,261 930,492 838,958 684,261 570,492 478,958
Incremental Goods & Products Inventory
- 92,635 113,479 129,550 312,597 282,231 (91,534) (154,697) (113,769) (91,534) -
Total Cash Utilized
459,318 762,099 647,824 620,012 808,969 763,202 309,085 204,023 64,985 71,219 (14,994)
Aligned capital received
5,400,000 900,000 1,800,000 900,000 - - - - - - 4,500,000
Cash in Hand 5,578,206 5,716,107 6,868,283 7,148,272 6,339,303 5,576,101 5,267,016 5,062,993 4,998,008 4,926,789 9,441,783 Note: * Net Burn = (Opex + Marketing) – Total Gross Margin; HP Tabs = Hewlett-Packard Tablets; ₹ = INR = Indian rupee. Source: Company documents.
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EXHIBIT 6: COMPANY REVENUE DETAILS December
2018 January
2019 February
2019 March 2019
April 2019
May 2019
June 2019
July 2019
August 2019
September 2019
October 2019
Number. of Partner Clinics
11 18 22 25 29 40 43 58 58 61 61
Number of Patients treated
29 50 67 83 97 250 254 335 376 410 437
Effective CAC per Patient (in ₹) 657 470 565 544 560 856 872 860 656 839 807
Revenue from In- Clinic Treatments (in ₹)
161,568 196,506 294,678 412,632 483,570 901,476 1,788,570 2,164,608 2,269,476 2,580,570 3,064,608
Average Ticket Size 10,098 7,018 7,964 8,970 8,955 6,485 12,685 11,638 10,859 11,318 12,612
Gross Margin 38,776 41,266 55,989 57,768 75,007 135,207 250,286 303,045 321,941 400,716 447,390
Gross Margin % 43% 38% 34% 25% 28% 27% 25% 25% 26% 28% 26%
Number of Patients Treated
- 7 14 22 32 31 27 43 52 68 94
Revenues from Out- Clinic Treatments (in ₹)
- 8,798 99,396 123,323 128,898 154,440 158,598 163,026 190,440 207,918 235,026
Average Ticket Size (in ₹)
- 12,200 12,425 10,277 7,161 9,085 10,573 6,793 6,567 5,472 4,520
Gross Margin (in ₹) - 12,535 16,389 25,898 30,936 47,855 23,148 25,235 36,184 37,425 38,555
Gross Margin % - 46% 30% 38% 43% 56% 26% 28% 34% 32% 30%
Revenue from Dental Products (in ₹) - - - 65,439 82,710 140,702 254,999 404,779 578,682 388,314 375,606
Number of Products Sold
- - - - 482 871 1,309 2,315 871 1,309 2,315
Gross Margin (in ₹) - - - 17,638 28,939 49,329 58,512 79,529 153,371 117,054 97,579
Gross Margin% 49% 63% 63% 41% 35% 48% 54% 47%
CAC (in ₹) - - - - 96 61 70 30 61 70 16
Average Ticket Size (in ₹)
- - - - 309 291 351 315 1,196 534 292
Note: CAC = customer acquisition cost; ₹ = INR = Indian rupee. Source: Company documents. A
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EXHIBIT 7: DOC32 REVENUE MODEL
Patient or Consumer Purchase Partner Clinics
15–20% of diagnosis fees (based on net treatment value) Part of the supply margin on clinic supplies
Direct-to-consumer product and service subscriptions Subscription fee from partner dentists
Long-term revenue from research analytics on patient data
Long-term revenue from research analytics on service patterns
Note: The revenue model of Doc32 revealed that overall, 57% of the revenue comes from partnership fees from Doc32 clinics, 29% of the revenue comes from supply margins in clinic supplies, and 14% of the revenue comes from consumer subscriptions and products. Source: Company documents.
EXHIBIT 8: DOC32 COMPETITOR MATRIX
Note: Capex/clinic ownership represents companies with funding available; Doc32 falls below most competitors in this aspect but ranks high for service quality assurance. Source: Created by the authors.
57%
14%
29%
0%
10%
20%
30%
40%
50%
60%
Partnership fees from Doc32 Clinics
Consumer Subscriptions and Products
Supply margins in Clinic supplies
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