Most of us have been closely watching the world’s reaction to the covid-19 pandemic. And I must say there is a lot of learning for all us going forward. Like many of us, I have gone through a journey of personal introspection. Also after losing both my parents along with my eldest sister ( not related to COVID ), and then seeing so many people die needlessly before their time during the pandemic, I think my personal priorities and focus have also changed somewhat.
In my view health is truly the real wealth especially in a wold of covid-19 induced pandemic. What I have realised is that, the current design of healthcare needs to be reinvented and re-imagined. So therefore, there is an immediate need for transforming the healthcare. And this is where a human imagination comes quite handy.
As an entrepreneur who learns from nature my approach has always been to create the future from what already exists. By humanising hospitals, marrying modern medicine with ancient healing techniques, being open to a more holistic and integrated delivery of preventative primary healthcare, adapting to latest technologies and most importantly becoming an invested partner in the healthcare journey of individuals, is part of my own design of what the healthcare of the future should look like.
In my opinion nature is truly the best value creator that there is. It has managed to create hundreds of trillions of dollars worth of value over time, and in the process hardly any misallocation of resources. Nature has very cleverly built an interdependent and intertwined ecosystem where all of its creation have a vested interest in keeping the entire ecosystem sustainable because their own survival is dependent on it.
And this model of creating value is currently missing in our overall economic design. So with a group of close friends, we have started a journey of delivering a global ecosystem through a centre of excellence for integrated healthcare that focuses on longevity, which is almost an $ 8 Trillion market and growing, Wellness approximately- a $ 4 trillion market and growing , Nutraceuticals close to a $ 500 billion market, preventative healthcare technologies ( health-tech )- a $ 430 billion in market size and continuously growing, complimentary and alternative healthcare aka allied health roughly a $ 90 billion market, followed by the health diagnostic – a $ 100 billion market size business on its own, medtech education- a $ 75 billion market and growing along with mental well-being is now a $ 121 billion market and growing among others. The centre of excellence is integrated and plugged into all of these high growing healthcare and healthcare related markets. So the overall opportunity as well as the size of the market along with the ability of the centre of excellence for integrated healthcare ( the healthcare ecosystem ) to continuously create future value is enormous.
Any business is only as good at its people, and by populating the centre of excellence for integrated healthcare with the right set of people and partners, we have deliberately designed our business, the centre of excellence for integrated healthcare that is, to tap into all these growing areas. Also, to better serve the senior citizens in our society, we have started the journey of transforming care homes into a new age living concept giving them a new lease of life with an embedded healthcare concierge support through our state of the art all-in-one polyclinics supported by the centre of excellence. This is already a $ 512 billion market.
The wisdom accelerator program that is part of the new age living concept allows the senior citizens to be active and also be productive member of the society. By transferring and sharing their wealth of experience to the younger adults, they will be enriching and mentoring teenagers who need guidance and help to plan for what the live has in store for them.
Taking the healthcare concierge concept forward, we are also working with selected developers to embed preventative primary healthcare infrastructure and offerings included in the overall core estate services provided by the estate managers operating the residential complexes on a profit sharing basis. This allows the developers to uniquely position their developments and the residence of access primary healthcare through an easy subscription fees which is part of their estate charges.
The technology enabled state-of-the-art “ all-in-one polyclinics” which supports the centre of excellence as satellite centres focused on preventative primary healthcare is aimed to deliver the highest quality of primary care under our planned “ continuity of care “ strategy to people across the society especially in the rural areas. This all-in-one-polyclinic infrastructure is aiming to also relieve pressure on existing hospitals in growing societies.
To get more buy-ins I have had a number of interactions with various stakeholders across different markets, and those who understand healthcare quite well believe that they have not come across such a business model that allows all different types of healthcare service providers to collaborate inside a single ecosystem. And it is great to have more people coming forward to collaborate, because we know execution will be key to making this ecosystem work for people on a long term basis. Our collaborative and partnership model is designed to reduce execution risks.
I firmly believe that if you build a strong business focused on people then profit will surely come, but if you build a business just to chase profit then you are also running the risk of opening the flood gates for losses to creep in. In our business case people will be able to rely on the centre of excellence for most, if not all of their healthcare journey during their lifetime becoming a partner fully invested in their well-being. Also Investors who will invest with us do get an automatic diversification in a pool of attractive healthcare related opportunities from a single investment. So therefore, when they are betting on us, they are in fact betting on a range of different horses through one single investment, and not just one horse, which obviously increase their chances.
The centre of excellence for Integrated healthcare is a very high growth business focused on delivering and creating continuous value all across. By being able to capture the entire healthcare journey of a person the centre in some ways will have a customer for life.
So what does this all mean to a potential or an existing shareholder one may rightly ask ? Well! To start with let us look at the revenue projection. The centre is aiming to achieve a $ 100 million in revenues over 3-years. Which isn’t difficult especially if you consider the overall offering. Now with a conservative EBITDA of 25% and a valuation of 6x ( most wellness, longevity and other similar businesses use a valuation multiple of 13x their projected EBITDA), we are looking at $ 150 million valuation in 3-years. On average healthcare companies carry a much higher multiple, so the valuation carries a huge discount.
I would say that as the markets get more complex the way we value a business is also evolving, so quite frankly, none of us know how to rightly value a business. Sometimes it is all about which way the wind is blowing and where the trends are heading. So therefore, a large part of the capital raise is based on how you narrate a story or the opportunity to potential investors. And in my experience, getting a lot of buy-in from people really helps. Bible wont work if a high number of people didn’t buy into the stories in the bible. Every business has financial and non financial metrics, but no company is born with financial metric so it is the non financial metrics of a company that decides what happens to it.
Also one key component of the business model is that the centre of excellence for integrated healthcare is more of a plug-n-play model. So almost every business that is part of the centre already exists and is profitable. Also each of these businesses can have their own independent exit as they are all part of the pool of businesses within the centre.
And the global presence and linkage of the centres across various markets with each other in a way creates a global ecosystem market place, where customers have a strong control of their healthcare data as well as their healthcare journey wherever they are as part of the continuity of care plan. The execution and integration risks are extremely low because the team that runs these specific businesses are also part of the centre of excellence so it’s designed to have the lowest loss of transmission and a very high level of efficiency. This is key to passing due diligence process of most investors.
The conceived business model allows the owners, which in our case are Harley Street healthcare group PLC and its subsidiaries to create multiple exit options for their shareholders. For example, Harley Street HealthCare Group could easily sell the wellness side of the business for few hundred millions to a private equity firm. It could do the same for the diagnostic centre along with other businesses within the centre of Excellence. So the strategy allows the investors to get a very high multiple return on their investment.
We are aiming to reinvent the future of healthcare, and in the process create continuous value for all the stakeholders. In our own assessment, we feel reasonably confident that we are building a multi billion dollar global business over 5-6 years. The scale of the opportunity is huge, and therefore, there will always be a room for other players to come in. And I won’t be surprised at all if large private equity firms along with healthcare firms will compete with each other to take over the business that we are busy building. But our plan is to go as far as we can, and as part of the larger plan Harley Street Healthcare Group at some point will indeed do an IPO giving the initial backers a very attractive return on their investment. So that’s the journey ahead, and we are hoping others will come along on this very interesting journey with us.