Matrix Partners, the US-based private equity firm with $3 billion under management, on Friday announced that it has invested Rs 45 crore through its India investment arm in Kids Clinic India Private Limited, a Bangalore-based provider of maternity and infant care under the brand Cloudnine. Matrix is the sole investor in the first institutional round of funding. With this fund infusion, Matrix has acquired a significant minority stake in Cloudnine.
Matrix is looking for opportunities in speciality healthcare models. It is an easily replicable model, unlike that of a super-speciality or multi-speciality hospital model, said Avnish Bajaj, co-founder and managing director, Matrix India.
In the immediate future, Matrix hopes to drive the group’s expansion into Mumbai. After this, the boutique hospital will expand to Chennai, Coimbatore and Kochi. The capital infusion announced on Friday is expected to provide growth capital for the expansion of Cloudnine.
It’s the low gestation period of this model that makes it attractive for Matrix. While the gestation period for a super-speciality hospital may be as long as seven years, in case of the speciality model, the gestation period is as low as two or three years.
“It could reach operational break-even in the very first year of its operations. It’s the efficiencies provided by the model that allows for more efficient use of infrastructure and helps control costs which could be passed on to the ‘patients’,” added Bajaj. Matrix will not only help the hospital expand, but will also bring in the best practices; help with recruitments through their relationship with head hunters; help with inorganic growth of the company; also help the company actively and chart out its future strategies, said Bajaj.
Matrix aims to exit the company through an IPO, which is the exit route it follows except in the case of its investments in Internet and mobile start-ups.
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“This capital infusion provides Kids Clinic Bangalore Pvt Ltd the growth capital for expansion. We believe that Matrix is the right partner for us during this growth phase given their understanding of the healthcare services sector,’ said Dr R Kishore Kumar, Managing Director and co-founder, Kids Clinic India Private Limited.
Cloudnine was earlier known as The Cradle, which was licensed from the Apollo Hospitals group. The company is looking at opening 30-40 bed centres with a staff strength of 120 in the next 18-20 months.