ID: 12234


Investment projects and startups in Ukraine

Medical services company

Raising capital for business expansion of a profitable medical company


Киев, Украина

Company overview

- 2 shareholders
- Company operates from 1999
- Company had been built from scratch
- Profitable business with the opportunity to multiply sales and profit
- The growth limiting factor is lack of finance to support sufficient stocks

Business model
1. 3 key sources of profit
a) Providing doctors’ services to insurance companies
b) Delivery of the medicines by the order of insurance companies
c) Medicines sales through the own pharmacy chain

2. Competitive advantages:
a) Working with the leaders of insurance market
b) Well-run system with own call-centre and delivery service
c) Ability to issue official sick leave certificate
d) Own pharmacies and pharmaceutical points
e) Long work with the leading pharmacy distributors

3. The company is currently profitable and capital is being raised to expand the business

Key customers

- Out of TOP 10 insurers the company works with 7
- Out of TOP 100insurers the company works with 44
- Kiev market share is 2.3% with the opportunity for multiple growth

Key market trends

Market of Voluntary Medical Insurance (VMI) grows in value
- Due to the change in legislation the VMI expenses became tax deductible starting from Q3-15 –growth acceleration expected
- Medicine sales grow in value
- Mid-price segment of the medical services is very weak –key players focus on the premium segment

Till now investors had done few deals with the companies operating in this marketplace:
- GP Advent International – Isida clinic, Kiev, majority stake, 2011
- GP Russia Partners - «Into-Sana», Odessa, 100%, 2012
- Oleg - Kalashnikov («Luxoptica») – 80% Dobrobut, Kiev, 2014


- General practice license and accreditation of the medical enterprise
- Company’s retail license for the medicine sale
- Retail license for the medicine sale for the each point of sale

Purpose of investment

  • There are agreements with the insurers to provide medical services and medicines delivery
  • To increase the number of doctors’ calls and deliveries of the medicines there is a necessity to keep sufficient stock of the medicine during the month –till the insurers pay their bills
  • Besides there is a number of pre-agreed point of sales in the medical enterprises to be opened. For that extra stock is needed
  • The investment will go to increase the stock for the deliveries (70%) and for the opening of the new points of sales (30%)

The benefits of business expansion

  • Business expansion does not add extra fixed costs – all sales are direct sales costs. Thus the margin increases
  • Additional financing allow to shift credit terms with the distributors to prepayment and get additional discount
  • With the growth of point of sales there is an opportunity to sign marketing agreements with the producers to get additional bonuses

Offer to the investor:

1) Investment $200,000
- Payback period (undiscounted) = 20 months
- IRR investor (which the investor rather than the project as a whole) on investment = the equivalent of 100% per annum in UAH
- We are ready to discuss the stake in the company = 18%

2) Investment $400,000
- Payback period (undiscounted) = 16 months
- IRR investor (which the investor rather than the project as a whole) on investment = the equivalent of 164% per annum in UAH
- We are ready to discuss the stake in the company = 25%



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