Ziqitza to the rescue
Ziqitza is aiming for social good by providing ambulance services both to the rich and poor across India
November 20, 2012 / 14:04 IST
By Shruti Chakraborty
Ravi Krishna’s friend passed away in a road accident because they couldn’t get an ambulance to take him to the hospital in time. Shaffi Mather’s mother had a medical emergency one night and could not reach the hospital in time either. The list of such experiences is endless. Mather and Krishna are, in fact, friends. Mather, Krishna and three mutual friends Sweta Mangal, Naresh Jain, and Manish Sacheti studied in the US and the UK. There they witnessed the success of the 911 and 999 emergency call services, and decided to bring home a similar model.In their first try, back in 2004, they pooled in about Rs. 2 crore and bought two ambulances to try out a similar model in Mumbai. At the time, they had all worked a few years and had jobs at companies like Reliance and Marico. The pilot went well enough for the quintet to quit their jobs and launch what is now known as Ziqitza Healthcare Ltd. back in 2005.Not a charityMangal, now the CEO of Ziqitza, shares that the initial idea was to run an emergency ambulance service from charity donations. “But we realized soon enough that a service like this could not be run sustainably on charity-the concern being, what if the funds dry up?” she says. Around the same time, Sam Pitroda, well-known Indian innovator and policymaker, was also mentoring the team. Mangal recollects Pitroda telling them that when one is running a service as essential as an ambulance service, it has to be on a sustainable basis.The team was in a quandary: it wanted to ensure that the service benefits the poor and they wanted to put a price on it.“The pricing model was one of our most important innovations,” says Mangal. “We realized that the poor would mostly take the ambulance to government hospitals, while those who could afford it would go to private hospitals.” Also, traditionally, the poor and the rich rarely ever got access to the same services-the rich would call for ambulances from private hospitals while the poor would get the service from an NGO.Pricing it rightWith this in mind, Ziqitza began to provide the same service to both sections of the society, but the way they did it was by subsidizing the cost by 50 percent for those who took the ambulance to a government hospital.The price put on the service was-Rs. 1,500 for the first 10 kilometers for a private hospital, and Rs. 750 for a government hospital-for the basic life support ambulances.The company also has advanced life support ambulances, which have ventilators, resuscitation kits etc. equipped to provide more complex medical support. For these, Ziqitza charges Rs. 2,000 for the first 10 kilometers for a private hospital, and Rs. 1,000 for a government hospital.The company’s services are now available in six states through two models, the first of which is a public-private partnership (PPP) with the government. The other model sees the company operate on its own.The PPP model works through the helpline number 108, while Ziqitza’s own helpline number is 1298.The founders claim that the 108 services are provided for free by them; and paid for by the government.On the other hand, their customers pay for the 1298 services.Widening the spreadMangal says that since the initial motive was to reach out to as many poor people as possible, tying up with the government was their best bet. The company has 800 ambulances in various parts of the country via the PPP model and 60 in the 1298 direct service model. “Most of the ambulances in the 108 model are basic life support ambulances,” Mangal shares. Resultantly, the company earns a larger section of its income through the PPP model.Another revenue source is through advertising and corporate sponsorships on the body of the ambulances from socially responsible companies. Hospitals also outsource their ambulance services to Ziqitza, which opens up another revenue channel. Chains like Max Hospitals and Fortis Hospitals have outsourced their ambulance services to the company.Ziqitza clocked a turnover of Rs. 80 crore in 2011-’12 and also broke even in 2011. Most of its expansion has been funded through the two rounds of funding it received in 2007 and in 2010-the first via impact investing firm Acumen Fund. The second round saw Acumen Fund along with HDFC, IDFC and a few more investors putting their funds into Ziqitza.Team firstMangal recounts that raising capital and working with the government have been amongst her biggest challenges. Another challenge she remembers facing was getting drivers, doctors and nurses to work on ambulances. “Most doctors and nurses felt that it would be better for their careers to work at hospitals,” she says.One of her biggest learnings has been that it is important to invest in building a good team. From the five founders, Mangal is now the only one actively involved in running the company. The others have taken a backseat, leaving the operations of the company to professionals they have hired. In fact, the company now has around 4,800 people working with them and has served 16.5 lakh people so far.On growing its coverage across states, Mangal says that it is tough to say to which state Ziqitza will provide the PPP model next because it really does depend on the state governments. “We will bid for the tender in whichever state that invites private companies to provide the 108 service,” she says.Ankur Shah, India Director of the Acumen Fund, which has invested in Ziqitza, says that the company has grown to one of the top five ambulance service providers in the country. For most of the social ventures, working with the government has been the greatest challenge and is also potentially a big opportunity.However, more expansion is expected on the 1298 front. In the next three years, Mangal says the company is looking to incorporate more ambulances in its 1298 model and grow its fleet to 500 ambulances.Entrepreneur India October 2012 Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
