Investment to grow, while retaining control.

Kikada Lane Dental run a unique aggregated clinic model and they faced a similar challenge to most small to medium enterprises: it required investment for the next growth phase but their needs were too small for a typical private equity fund and too large for individual investor consortiums to assemble. Plus, Kikada Lane Dental wanted to maintain control and drive the future growth of its business.

To achieve this ambitious vision, it needed a different type of growth partner. One that provides patient capital and a minority stake in the business. Enter the Australian Business Growth Fund, with a $10 million investment.

Case Study – Kikada Lane Dental

Kikada Lane Dental

 

Aligning health, purpose and profit

The Australian dental services market is a $10.4 billion business. With almost 8,000 unique employing businesses, and 83% of employed dentists working in private practice, it is also a highly fragmented one.

Founded in 2019, Kikada Lane Dental is a unique aggregated specialist healthcare model. It consolidates strategic, clinical and financial interests for individual dental practitioners, while allowing them to maintain clinical control and business oversight.

In two years of operation, Kikada Lane Dental has expanded to include 13 locations across New South Wales, Queensland, Victoria and South Australia – a noteworthy result given it was achieved in the middle of a pandemic!

Kikada Lane Dental has ambitious growth plans to extend its footprint over the next five years to include more than 60 clinics nationwide. Such expansion will see it become one of the five largest dental providers in the country, and enable the delivery of quality care at scale, while tripling its revenue across the same period.

A distinctive business model

It might seem obvious, but dentists enter the profession to become clinicians. Then reality hits, and they spend much of their time running the business – office management, human resources, IT, finance, insurance, and the rest.

“Our practitioners are able to focus on what matters most to them – delivering better levels of service and upskilling their capabilities into areas of interest – with many time-consuming tasks taken care of,” says Kikada Lane Dental founder and managing director, Dr Peter Hughes.

“With superior levels of corporate support across human resources, finance, marketing, operations and training, and economies of scale for procurement purposes, practitioners can operate with autonomy, more effectively deploying treatments and care to their patients.”

The model also gives participating practitioners access to a future exit strategy that delivers several tiers of enhanced wealth creation. As Dr Hughes explains, “our practitioners have a better work-life situation, and confidence their futures are well looked after.”

In addition to being a smart business model, Kikada Lane Dental provides significant benefit to the communities it services. In FY18 alone, 72,000 hospitalisations occurred for dental conditions that may have been prevented with earlier treatment. So, a more efficient and effective dental practice is not only good for the profession, it is good for Australians too.

A growth mindset partnership

Just weeks after Kikada Lane Dental first reached out to the Australian Business Growth Fund through a website enquiry, a $10 million investment was made.

“Meaningful growth and effective integration of future practices requires patient capital investment,” says Dr Hughes. “In looking at options to grow our business, the Australian Business Growth Fund had the most attractive offer, as we get to benefit from partnering with experienced investors and a strong professional network, without giving up control. We wanted an investor who would partner with us and not put constraints on us.”

As an active investor, the Australian Business Growth Fund is working with the Kikada Lane Dental team to appoint a non-executive chair. The Australian Business Growth’s co-head of investments, Ghazaleh Lyari, will take a position on the board. “The Kikada Lane Dental team, led by Dr Peter Hughes, is an incredibly experienced team of professionals, and we believe they have what it takes to deliver on their exciting and ambitious plans for the group. We will be here to support them each step of the way.”

The partnership with Kikada Lane Dental marks the Australian Business Growth Fund’s second investment in the past two months and demonstrates the commitment to back growth businesses, irrespective of the industries they operate in.

Looking for a minority investor?

At the Australian Business Growth Fund, we back Australian businesses to thrive. We’re currently building an ‘investment pipeline’ of companies with potential for growth. For small to medium enterprises with over $2 million in revenue and a proven business model, we’re here to back your ambitions. Start the conversation with us here.