“Our ‘Make in India for India’ efforts would reach its desired impact only if we supplemented the great work we are doing in the design, development and manufacturing front with an equally innovative and radical idea of making these products available to people who need them the most,” said Nalinikanth Gollagunta, CEO of GE India in an emailed statement. “GenWorks helps us meet those aspirations. It helps us in our mission of working for a healthier India.”
What will this tie-up give?
The tie-up with GE ensures GenWorks earns revenue, says Kannan Ramesh of Somerset Investments, that is investing in the company. “It gave us comfort that the relationship [between GE and GenWorks] is strong and locked-in, and there is a fair bit of bonding between the companies,” he said.
“Unlike a pure-play distribution, where it can be changed or altered, here, GE is involved as a principal and an investor. That balances out any risk of GE pulling out and handing out distribution to someone.”
But the manpower challenges remain. GenWorks needs to retain sales reps who become highly sought after once they get some experience. To do so, it has become an organization of scale, giving them a competitive salary and opportunities for growth. “We have to take good care of them,” Ganeshprasad said.
GenWorks pays its sales reps as much GE or Siemens Healthineers, Ganeshprasad said. The company is now in about 450 districts, up from 200 when it started. It now has 350 employees. It booked about Rs 90 crore ($12.7 million) in revenue in 2018.
That came mostly from GE, for whom it sold about $60 million worth of products last year, according to Ganeshprasad. Ganeshprasad expects that to grow by 10 to 15% compounded annual growth in the next three years. He sees the potential for growth up to Rs 800 crore ($113 million).
And then what? He also knows that GenWorks can’t settle. With a pan-India network now in place, he needs to find more for his sales force to sell and grow, or else risk attrition.
Last year, Ganeshprasad began selling non-GE products that do not compete with GE’s core portfolio. That’s mostly devices that are used in preventative screening—things like hearing and jaundice screening, which the World Health Organization recommends for newborns.
It’s a challenging task. India is considered a treatment market, where people go to the doctor only when they are seriously ill. Preventative screening is done rarely, if at all. Still, Ganeshprasad sees an opportunity, inspired by the likes of other startups incubated by GE, such as Tricog Health. GenWorks is planning to sell diagnostics as a service to healthcare centers, rather than just the box. This would generate recurring revenue off its low-cost device portfolio of GE and non-GE products.
Tricog has been doing this with heart health since 2014. It is now servicing 1,500 centers and has screened 1.3 million Indians, but Bhograj, the co-founder, has found it difficult to take the service to the farthest corners of India. Distribution has been a challenge. In the past year, Tricog has tied up with GenWorks as the distribution partner.
Amplifying the efficiency
“GenWorks has been able to provide pan-India coverage in a more efficient manner than I’ve been able to do on my own,” said Bhograj. “These are a bunch of professionals who’ve done medical distribution across the spectrum for more than a decade.”
At the Apollo Hospitals in Chennai and Hyderabad, GenWorks and Tricog distributed GE’s ECG machines to 10 general physician clinics around Apollo that send patients to the hospital for treatment.
The doctors did 3,000 ECGs over six months. Out of those, 8% of patients required immediate treatment and 30% further diagnostic testing. Apollo paid for the ECGs, at a subscription of about Rs 5,000 ($70) per month, Ganeshprasad said.
The hospital more than earned it back by treating the patients; heart surgery can cost many lakhs. The pilot has now converted into a permanent subscription.
Ganeshprasad believes that this op-ex model will be particularly appealing in tier 2, 3 and 4 cities, where hospitals have less capital to invest in equipment. And given the strength of GenWorks’ distribution network, Ganeshprasad believes he can execute his vision, and enable others like Tricog to execute theirs, too.