Impact Investment Profile

Investor

LGT Impact Ventures

Investee

Dr. Consulta

Clinic locations are carefully selected and in easily accessible areas to attract a high volume of people.

LGT Impact Ventures invests in purpose-driven companies that have scalable business models and provide disadvantaged people with access to essential services, products, and livelihood opportunities in growth markets. Dr. Consulta provides high-quality, low-cost specialty healthcare and diagnostic services to Brazil’s low- to middle-income population. LGT Impact Ventures’ investment in Dr. Consulta has been used to expand the clinic network from one clinic to 10 clinics.

Investor Targeted Impact

Provide medical services to underserved populations in Brazil.

Investor

Name LGT Impact Ventures
Investor Description LGT Impact Ventures (LGT IV) is a private equity impact investor targeting both financial return and positive social and/or environmental impact. LGT IV invests in purpose-driven companies that have scalable business models and provide disadvantaged people with access to essential services, products, and livelihood opportunities. Headquartered in Zurich with local teams in Latin America, Africa, India, Southeast Asia, China, and the UK, LGT IV focuses on sectors with investment opportunities in growth markets such as education, health, agriculture, energy, and information and communication technologies.

To date LGT IV has invested over USD 60 million into 17 companies, improving the quality of life of 2.5 million disadvantaged people in 2015 alone.

LGT IV is the impact investing arm of LGT, the world’s largest privately owned Private Banking and Asset Management group, with USD 146.3 billion assets under management as of June 30, 2016.

Investee

Name Dr. Consulta
Sector Health
Geography Brazil – Sao Paulo
INVESTEE BUSINESS MODEL Seventy-five percent of Brazil’s population (150 million people) either does not have access to healthcare or relies on the public healthcare system, which is often criticized for being inefficient, underfunded, and unable to provide quality and timely services.

Public clinics in Brazil are often perceived as scarce and of poor quality. For example, in Sao Paulo, there are only 16 public specialty care clinics available to serve 15 million people, which calculates to around one clinic for every million people. This leads to overcrowded waiting rooms and long wait times. Without affordable quality healthcare services, much of Brazil’s base of the pyramid population does not have access to adequate healthcare.

Dr. Consulta works to offer accessible high-quality healthcare for all Brazilians through a network of technology-enabled centers across Brazil. Founded in 2011, Dr. Consulta is a for-profit company that aims to offer quality and affordable healthcare to underprivileged communities in Brazil. Patients are seen by appointment only, and Dr. Consulta provides services through a one-stop medical clinic that provides consultations, as well as treatment for ambulatory (outpatient) patients that require minor procedures. Alongside general medicine, services include more than 30 specializations including gynecology, dermatology, cardiology, ophthalmology, urology, orthopedics, endoscopy, gastroenterology, angiology (vascular medicine), otolaryngology (nose), and nutrition. All medical services are provided at the clinics, with the exception of laboratory and pathology exams, which are outsourced.

Dr. Consulta’s value proposition is affordable, high-quality healthcare close to home. Dr. Consulta offers fast appointment service, (one week instead of six months, the average time frame for other healthcare clinics in the region), low consultation prices (a quarter of the price of the private, high-income competition), and high-quality medical equipment and medical staff.

Today, Dr. Consulta operates a network of 16 centers located primarily in urban areas of Sao Paulo with high pedestrian traffic. Dr. Consulta is on track to open 14 additional centers by the end of 2016 with the goal of reaching a network of 50 centers by the end of 2017.
MOTIVATION FOR INVESTMENT Overall LGT IV had a positive impression of Dr. Consulta’s team, business model, and social impact potential. The most salient reasons LGT IV invested in Dr. Consulta are below:

Effectiveness: Dr. Consulta is a rapidly evolving company, which has the capacity to positively influence the next generation of clinics in emerging countries. The high customer satisfaction level, a full body of high quality doctors, and a relatively known brand name, indicate that the company is effective.

Efficiency: Efficiency and a result orientation are key elements of Dr. Consulta’s culture.

Scalability: There is a strong demand for Dr. Consulta’s services. The acquired learnings from various clinics will positively influence the next generation of clinics.

Team & Board: The team comprises highly ambitious, results-driven and capable senior managers with strong values and 10-15 years of business experience.

Impact: One clinic has the potential to positively impact 50,000 people per year. In Dr. Consulta, LGT IV hopes to create a culture of preventive care for a population that is most vulnerable to chronic diseases. The appeal of Dr. Consulta’s service among underserved populations is evident by the increasing numbers of patients.

Dr. Consulta’s competitive advantage is their use of technology to increase operational efficiencies, which has helped them in becoming financially sustainable.

Investment

INSTRUMENT Equity
INVESTMENT SIZE USD 10 million
Source of Deal Referral by one of LGT IV’s local partners. Internal scan was based on:

1. Management
2. Proven effectiveness and efficiency of solution/business model
3. Market growth
4. Impact potential
STAGE OF COMPANY AT TIME OF INVESTMENT Early/Growth stage. The company operated one successful clinic at the time of investment.
PURPOSE OF INVESTMENT The funds of LGT IV have been invested to expand the clinic network from one clinic to 10 clinics. Most of the cash was used to cover CAPEX infrastructure, such as ultrasound, electrocardiogram, echocardiogram, mammography and eye equipment, as well as CAPEX information technology and OPEX. Technology is key for Dr. Consulta clinics. Investments have been made, among others, to create a proprietary CRM platform to improve patient and doctor experience in the clinics as well as apps and a website.
INVESTMENT IMPACT OBJECTIVES LGT IV’s objective for investing in Dr. Consulta is to provide one million medical services to underserved populations in Brazil by the end of 2016.

In addition, through their investment in Dr. Consulta, LGT IV hopes to:

• Help individuals experience better overall health due to modern examination and diagnosis services, timely consultations, and a focus on preventative healthcare

• Provide better accessibility to health care services for underserved populations by encouraging patients to visit a doctor when they are sick, shorter waiting times at clinics, and services in close proximity to peoples’ homes

• Provide affordable, quality health care by offering services at low prices. On average, services are 63% cheaper than benchmark prices according to national insurance plans and medical associations. In addition, Dr. Consulta offers installment payments for up to 24 months.
IMPACT METRICS TRACKED ON INVESTMENT • Number of low-income patients served; IRIS - Client Individuals: Low Income ID: PI7098
• Number of medical services delivered
• Number of satisfied clients
• Number of repeat clients

More Information

LGT Impact Ventures website >
GIIN Investors' Council membership profile - LGT Impact Ventures >
Dr. Consulta website >

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