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Tuesday, November 29, 2022

Forus seeks growth in US after saving millions from blindness with its devices

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With its inexpensive and portable eye screening equipment, Forus has rescued millions of people
from blindness, including infants. It created a global network along the way, including hospital chains
and technological behemoths, which it is now using as it embarks on another daring voyage.

Forus Health, located in Bengaluru, took 12 years to become profitable, with majority of its revenue
coming from sales of its unique eye screening equipment, which include one of the world’s most
advanced instruments for identifying retinopathy in preterm newborns.

The firm is now forecasting a 500% increase in sales over the next five years as it flips its business model,
focusing on services and platforms as it plans an aggressive growth in the United States.

Services and platforms, which are considered more investor-friendly, presently account for around 10%
of Forus’ revenue.

The business expects this to expand to 70% in five years, with substantial growth coming from the
United States, which is a particularly difficult market for local med-tech and biotech startups.

A victory there would be crucial for India’s wider health-tech sector. To support this expansion, Forus is
launching its fifth financing round. Since its inception in 2010, it has only raised roughly $18 million.

Founder-CEO K. Chandrasekhar did not reveal how much the firm expects to raise currently, nor did he
reveal Forus’ current and projected valuation, just stating that the company will remain prudent in
financing.

It might be frustrating to hear that someone has raised $50 million or $200 million.

According to Chandrasekhar, Forus’s main transformation objective is to become a digital platform and
use artificial intelligence to reach millions of people internationally. As part of this, the firm intends to
invest at least $5 million in its US growth over the next two to three years.

Forus established a subsidiary in the United States in 2016, with the goal of establishing a network of
eyecare professionals, clinics and hospitals, and other stakeholders.

Sameer Wagle is Managing Director at Asian HealthCare Fund, which invested in Forus for the first time
in 2014.

He says, “Forus is one of the very few (domestic med-tech) businesses having five US patents.”

According to corporate forecasts supplied by Sameer, the worldwide ophthalmic devices market is
worth around $5 billion and is predicted to expand at a compounded annual growth rate of 5% through
2030.

The retinal imaging equipment market accounts for around $2.06 billion of this total and is predicted to
expand at a 5.6% annual rate through 2030.

“Forus is at an inflection moment,” Sameer says, noting the company’s three growth levers.

He adds, “Its device portfolio will continue to grow, but growth will also come from the two newest
engines… The sale of equipment will increase steadily, and we will witness tremendous development
from the services sector and the US market.Forus reported a profit of Rs 18.71 lakh for fiscal year 2021-
22, up from a deficit of Rs 1.09 crore the previous year, while revenue increased by 30% to Rs 28.11
crore.”

The business anticipates sales of Rs 39.58 crore in FY 2023, rising to Rs 168.7 crore in FY 2027.

Chandrasekhar, a BITS-Pilani and IIM-Calcutta graduate, was formerly a Director of Strategy at the
Netherlands-based NXP Semiconductors, which was split out from Philips in 2006. “I picked engineering
because I was lousy at biology,” he explains.

Following months of talks with Dr. S. Aravind, currently Chief Medical Officer at Aravind Eye Hospital in
Chennai, he launched Forus (literally, for us, for Indians) for widespread early intervention in avoidable
blindness.

As Chandrasekhar visited with doctors and, more crucially, patients, he became familiar with some of
the major barriers to preventative eye care. Among these include a reluctance to spend hours with the
eyes dilated (which might cost many hours of work) and a severe lack of ophthalmologists (one for per
70,000 people in India, which hasn’t changed much since).

That’s when Chandrasekhar decided to create a small and durable gadget capable of recording pictures
without dilatation and enabling remote diagnosis (the ‘cloud’ wasn’t a common notion at the time).
Since then, Forus has created a number of specialized eye screening equipment, including the 3nethra
neo HD FA, which is regarded as one of the most advanced in the world for newborn retinal imaging.

Retinopathy of Prematurity, or RoP, is an eye illness that can cause significant vision impairment and
even blindness in preterm newborns but is treatable with early discovery and treatment.

Forus established an ecosystem of experts as it marketed these devices, mostly to retina doctors and
ophthalmologists, which it can now leverage for its services and platform play.

“That is where I see the most development. When we go straight to the consumer, the reach is
considerably broader “Chandrasekhar adds

According to the World Health Organization, at least 2.2 billion individuals worldwide have near or
distance visual impairment, which might have been avoided or is still unaddressed for around half of
them.

WHO estimates that the yearly worldwide expenditures of uncorrected myopia and presbyopia alone
are $244 billion and $25.4 billion, respectively.

While numerous firms, including worldwide brands, have begun to actively address this issue, even with
low-cost solutions, Forus continues to stand out.

Dr. Aravind says, “Forus played an important role in building this industry (for inexpensive retina imaging
equipment) They play a very essential function on a global scale. While (device) cost is no longer a
barrier, Forus now has an advantage due to the network effect.”

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