Medicover, a Swedish company enters India’s IVF market

The Swedish firm company Medicover Healthcare is all set to invest in the IVF market with an initial investment of $100 million. It is a joint effort of some of the Private Equity backed IVF firms and a host of other companies operating together in a fragmented market.

Felipe Velasquez, Commercial Director: Medicover Healthcare said that the company would have around 50 green-field Medicover Fertility clinics in the coming three years. Moreover, of that 50 clinics, the company as of now will open four clinics: two in New Delhi and one each in Noida and Gurgaon respectively in the coming two months. The aim is to have ten clinics by the end of the year,

Medicover will expand its operations and is hence planning to open other clinics in Punjab, Haryana, Uttarakhand and Uttar Pradesh, and then enter Maharashtra and Rajasthan in the following years. The investment will come from the Medicover Group.

There is a vast opportunity in the IVF sector as the IVF market is expected to grow at a CAGR of 20 per cent that is from 100,000 cycles currently to 260,000 cycles by the year 2020, according to report published by EY in the year 2015.

Felipe Velasquez, commercial director of Medicover Healthcare, said there are approximately 30 million infertile couples in the country, but only 150,000 of them are seeking fertility treatment. There are many competitors in the market and hence there is a significant demand out there that needs to be fulfilled. India is a growing economy, and with changing lifestyles like women wanting to focus on their career before trying to get pregnant, the market is eventually going to rise. So Medicover Fertility will try to focus on the premium market.

The cost of IVF treatment depends on an individual’s medical history which usually ranges from Rs 150,000 to Rs 200,000 per IVF cycle in India when compared it is three to four times lower than in the United States. Though the cost is relatively lower still the treatment is unaffordable for at least 80 per cent of the population as the service providers target people who are in the higher income strata. The low cost of IVF treatment in India also makes the country an attractive place for medical tourism.

The IVF market is fragmented in the sense that there are both domestic and a handful of foreign companies that offers Assisted Reproductive services. Some of the names of the competitors are:

  • Bourn Hall India, which is a part of the UK-based healthcare services firm Bourn Hall International. The Private equity firm TVM Capital MENA backs bourn Hall India.
  • Nova IVI Fertility, which is a joint venture between Nova Medical Centres Pvt Ltd and Spanish IVF technology firm IVI is another competitor.
  • Other than that, India’s multi-speciality hospital chains like Apollo Hospitals and Max Healthcare, also offer IVF services.
  • Cloudnine Hospitals (an Indian Company) which is focused on birthing also offers ART services.
  • Rainbow Hospitals also provides ART services along with primary paediatric services.

In a recent interaction with VC Circle, the co-founder and chairman of Cloudnine Hospitals, Kishore Kumar, said that they would expand their IVF business further.

Mr Gaurav Malhotra, Medicover Fertility, Managing Director said, as Cloudnine is a PE-funded company, so yes, after three or five years, the PE firm would want returns on its investment. Whereas Medicover Fertility is a family-owned business, so would stay for a long time in the market.

Mr Gaurav Malhotra, ex MD & CEO of Bourn Hall International India Private Ltd was also MD and CEO of Patni Healthcare Ltd, CEO of Medfort Hospital, Business Head – South Asia for Bausch & Lomb and the Business director for Johnson & Johnson Medical.

John Stubbington, CEO Of Medicover Group, said that Medicover, which is present in 15 countries including India and aims to invest revenues of $100 million in three years. He also said that Medicover Fertility in India would not enter other sections such as diagnostics and hospitals but only focus on the IVF market.