af design lessons from exits march07

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March 30, 2007Acumen Fund

Design Lessons from

Exited Investments

[email protected]

David Kyle: 1-646-747-3980

mailto:[email protected]

mailto:[email protected]



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• Bring the team up to speed on exitedinvestments

• Discuss the key lessons that have informed our investment process moving forward

• Brainstorm on how to share these lessonsbroadly and honestly, while maintaining

confidentiality

Objectives



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Acumen Fund’s exited investments to date

• Project Impact: Affordable hearing aids• Satelife: PDAs for disease management

• SSI: Immunosensors for low-cost disease

testing• Aravind Eye Hospital: Telemedicine for eye

disease

• A to Z: Anti-malaria bed net production

• Mytry: Low-cost de-fluoridation filters

• Heritage: Peri-urban water distribution &finance



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• Goal: Design, manufacture and distribute high-quality, low-cost hearing aid in India

• Problem: 3% of required number of hearing aidsin developing countries actually reach those inneed, due to low margins for manufacturers

• Produced a device costing < $50

• Distributed more than 10,000 hearing aids

India2001$400,000Grant

Project Impact: Affordable hearing aids



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• Importance of viable business model

• Understand customer preferences

• Test willingness to pay• Need for strong sales team

• Challenges in distribution through governmentsand institutions in public health

• Grant-making often does not lead towardsrevenue-generation and scale

Project Impact – Lessons Learned



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SatelLife: PDAs for disease management

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• Goal: Increase information available to healthcareworkers in rural Africa through hand-held computers

(PDAs) platform

• Problem: poor communications infrastructure leaveshealth professionals in rural areas without access tocritical up-to-date information on diseases andtreatments

• Pilot collection and analysis of data was successful-- 75% cost reduction in data collection

• Challenges with content and accessibility of information provided to health professionals

Global2001$324,000Grant



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• Local context and resources matters

• Non-profit framework

• Need for solid business plan and clear long-term goals

• Role of institutions in public health

• Informed our approach towards investing in

Voxiva, private healthcare informatics company

SatelLife – Lessons Learned



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SSI: Immunosensors for low-cost disease testing

• Goal: Portable, low-cost and easy-to-use devicefor dengue fever detection and potentially other

infectious diseases (i.e., HIV/AIDS)• Problem: 1/3rd the cost of current tests and in

places where detection is almost non-existent

• SSI made technical progress, but have beenunable to produce a portable diagnostic deviceready for field testing.

• Innovative intellectual property agreement

Global2002

$430,000Grant



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• Early stage technologies

• International vs country-specific investment

•Focus of promoters• Grant-making

• Investment management

• Intellectual property model for universities

SSI Immunosensors – Lessons Learned



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Aravind Eye Hospital: Telemedicine for eye disease

• Goal: Implementation of telemedicine to expandeyecare treatment and healthcare training

• Problem: 85% of the world’s blind (45m people)suffer from preventable blindness, but the poor canrarely afford the necessary eye surgeries.

• Aravind Eye Hospitals perform over 200,000surgeries a year and see over 1.3 millionoutpatients.

• Effective cross-subsidy: 70% of patients are treatedfor free.

• Telemedicine platform successfully developed and

utilized.

India2002$208,205Grant



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• Recognizing transformative socialentrepreneurs

• Cross-subsidy and pricing for the BOP

• Valuing our technical assistance

• Grant funding vs commercial model

Aravind – Lessons Learned



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A to Z: Anti-malaria bed net production

• Goal: Technology transfer, production anddistribution of long-lasting insecticide-treated bednets (LLITNs) for malaria protection

• Problem:

– Of the 300m episodes of malaria that cause over 1mfatalities annually, 90% are in Africa

– Bed nets are a cost-efficient solution, but prevailing

short-term insecticide-treated nets are ineffective

• Strong public-private partnership

– A to Z, Sumitomo, ExxonMobil, WHO, UNICEF

• Rapid expansion in production, now ramping up

production to 7m nets/year

Tanzania2002

$325,000Loan



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• Effective customer-centric product design• Managing partnerships

• Entrepreneurs who scale

•Investee relationship• Role of institutions in public health

• Experimentation with private sector channels – In 2005, Acumen Fund made a second investments of

$400,000 to launch private sector LLITN distributionchannels.

– In addition, a grant of $275,000 was provided for theprovision of $3 net subsidies for low-income households

A to Z – Lessons Learned



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Mytry: Low-cost de-fluoridation filters

• Goal: expansion of manufacturing anddistribution of the household fluoride filters

through dealer network• Problem: Excess fluoride in groundwater appears in 17 states in India (66 million peopleat risk)

• Launch of a for-profit company for

manufacturing and distribution• Well-vetted and appropriate product design

• Logistics required us to convert to a grant; didnot disburse final tranche

India2004

$185,000Loan



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• Financial vehicle

• Product financing

•Need for effective marketing strategy• Risk of sales to government

• Investee relationship -- transparency andcommunication

Mytry – Lessons Learned



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Heritage: Peri-urban water distribution & finance

• Goal: Provide credit for community water infrastructure in 20 urban and peri-urban slums;

demonstrate viability of community managedwater supply and application of credit for water.

• Problem: irregular and intermittent water supply,heavy time and resource commitment fromwomen and children

• Quantifying the opportunity costs of “free” butintermittent water supply

• Heritage ultimately did not access Acumen Fund’sinvestment due to technical and logisticalchallenges

India2004$300,000Loan



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• Financial structuring challenges

• Challenges of multiple priorities

•Focus on water storage – “Ripple Effect”• Innovator vs Entrepreneur

• Key risks to look for in Water Portfolio pipeline

Heritage – Lessons Learned



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• Cross-cutting issues from these 7investments

• Ongoing relationship with exitedinvestments

• Communicating exits and sharinglessons publicly

Issues for Discussion

af design lessons from exits march07

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