Co-Founders See Business Opportunity in Medical Supplies Industry

Alex Musyoka (left) and Tobias Reiter, co-founders of VIEBEG.

Tobias Reiter is the CEO and co-founder of VIEBEG, a healthcare technology company that provides medical supplies and equipment to the regions of Central and East Africa. Healthcare providers can purchase the products through the VIEBEG online platform.

Business start-up

Reiter grew up in Vienna, Austria, and studied business administration. He wanted to do something impactful and during a visit to Rwanda he met Alex Musyoka from Kenya.

At the time, Musyoka had been working in the medical supply industry for over 12 years and showed Reiter the problems that healthcare providers (hospitals, clinics and dental centers) face in East Africa. . There was a shortage of appropriate products and equipment as well as logistical challenges in getting the items to health care providers.

“Everywhere we went – Burundi, Rwanda, Congo, Kenya, Uganda – we saw the same,” Reiter says of the initial research in the area. “People were dying from diseases that could be treated if the right products were available. “

The co-founders identified the problem as poor inventory management and inconsistent purchasing. Reiter found that many health care providers in the area made their purchases on the intuition, recorded lists in notebooks, and did not really understand when they would need certain items.

Data-driven solution

VIEBEG officially started its activities in October 2018. The company has grown rapidly, relying on Musyoka’s contacts in the medical industry in Rwanda.

“We’re like the Amazon of medical supplies,” Reiter explains. “We take care of every step of the supply chain. From importing products to storing them in our warehouse, listing them on our platform and making last mile delivery. We even provide after-sales service or maintenance and assistance for certain machines and equipment.

The company retrieves the data it collects from different healthcare providers as they interact with the platform and – using predictive analytics and AI – ensures that it stores the the right equipment and the right products for its customers to effectively treat their patients.

“We work with over 500 healthcare providers and take care of every step of the supply chain for them. “

While Musyoka had a client base and ties to hospitals and healthcare providers in the region, the company had to work hard to secure its position with manufacturers and suppliers. “When you’re a start-up in Central Africa, manufacturers want to build trust before they send products on consignment and work with you,” reveals Reiter.

The products and equipment it lists on the platform include disposable needles, surgical gloves, local anesthetics as well as ultrasound and x-ray machines. Currently, VIEBEG is the official and exclusive distributor of some medical suppliers like Vatech, a Korean dental imaging company, and Aura Air, an air purification technology developed in America.

The economic model

VIEBEG takes a margin on the products it lists and sells, but ultimately it wants to move towards a commission model.

“We take care to optimize the payment terms available to us. For our clients, the healthcare providers, we have a buy-it-now and pay-on-the-go system. This allows hospitals to get the products up front and treat the patients to generate revenue, ”Reiter said.

Using the data available, the company can predict the best and most affordable payment plan for hospitals, for example. That way, these hospitals can get machines they otherwise wouldn’t have been able to afford, through structured down payments.

On the supplier side, VIEBEG has payment terms with certain manufacturers ranging from 45 days to six months after the product has been supplied on credit.

VIEBEG maintains a large stock of products and equipment in its warehouse in Kigali, as the receipt of imports in this landlocked country can take up to three months.

Reiter admits that there are risks associated with owning stocks. “We are combating this risk by building a huge logistics hub in East Africa that will serve Rwanda, Burundi, Kenya and Tanzania. Doing so will expand our target market and ensure that we can sell the products quickly. “

Last mile delivery

Getting products to their final destination is a challenge in many parts of the region. In Rwanda, the infrastructure is good, but in DRC and Burundi, anything can happen. “There can be war, civil unrest, even recently the Goma volcano (DRC). To make sure that we are reliable partners of our healthcare providers and that we are always able to deliver what they need, we manage our logistics in a data-driven way.

VIEBEG collects data on optimal delivery routes, has a flexible delivery fleet and works with various local partners to adapt to the specifics of delivery in each market. “We use motorcycles in Kigali so that we can quickly reach each hospital. We plan to add sensors to larger vehicles to collect data and record the optimal routes for each healthcare provider, as well as the best time of day to deliver, ”he said.

VIEBEG is establishing a second distribution center in Kenya and intends to open a local warehouse at Rwanda’s borders with DRC and Burundi from which to manage the supply.

Competitors

According to Reiter, VIEBEG’s current competition still comes from more traditional players such as brokers and companies that buy medical equipment and sell it as intermediaries.

“We have a huge advantage in that we are transparent and reliable. We also have much lower prices because we directly connect the supplier with the manufacturer and provide a one click solution.

Healthcare professionals can use the platform as long as they have access to a computer or smartphone with an Internet connection. The company is also considering offline solutions when the Internet is down.

There are other innovative international competitors. One example is Zipline, an American company that uses drones to deliver blood to Rwanda. “It provides emergency products and we are focused on optimizing inventory,” Reiter explains, adding that drone delivery for the size, type and volume of VIEBEG products will not be scalable.

To look forward

Reiter thinks Rwanda was the right market for VIEBEG to find its footing. While each country is different and the models cannot be replicated for different geographies, starting in a structured market like Rwanda gave the company time to establish points of proof.

“Right now, we are expanding into Kenya, which is a huge market. We want to show that our economic model also works in other countries. We are set to expand into Uganda and look to Kinshasa and even Ethiopia in the next two to five years. “


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