Lemon Healthcare seeks JV partners for market entry; IPO in March 2021, co-founder says

29 December 2020 - 11:43 am UTC


Lemon Healthcare, a South Korean medical service platform provider, is actively seeking JV partners to penetrate overseas markets including Southeast Asia, the US, China and Europe, co-founder and Vice President Tony Lim told this news service.

 

The Seoul-headquartered company is in discussions with several potential partners, Lim said.

 

Meanwhile, Lemon Healthcare filed its application on 22 December to go public in South Korea in March 2021, Lim said. The company will use its initial public offering (IPO) proceeds, approximately USD 40m, for its overseas expansion, which is its priority in 2021, Lim said.

 

Mirae Asset Daewoo and KB Securities are joint lead managers for its IPO on the KOSDAQ, Lim said.

 

Lemon Healthcare raised a KRW 5bn Series A round in March 2018 from Mirae Asset CapitalLSK InvestmentBNH Investment and KRW 10bn in Series B funding in March 2019 from NaverShinhan Capital and Aju IB investment, Lim said.

 

CEO Hong Byong-jin and related parties are the largest shareholders with an estimated 50.2% stake in Lemon Healthcare, Lim mentioned.

 

The company posted revenue of approximately KRW 25bn (USD 2m) in 2019 and is expected to generate revenue of about KRW 4.4bn by the end of 2020, Lim noted. It expects to reach breakeven point next year, Lim said. 

 

Its global peers include Japan-based M3, China-based Ping An Healthcare Doctor [HK: 1883], California, US-based Livongo and Texas, US-based Teladoc Healthcare.

Overseas Partners 

 

For its overseas expansion, Lemon Healthcare will work with local partners including digital healthcare companies, Lim said. The healthcare industry is very complicated with different laws and compliance requirements in each country, Lim added.

 

In Southeast Asia, we must have local partners since each country there has complicated healthcare laws and compliance requirements, Lim said, adding that while Lemon Healthcare will manage R&D, the local partners will handle sales, marketing and law/compliance issues.

 

The company plans to enter the Malaysia, Indonesia, Thailand, Singapore and Vietnam markets, Lim pointed out. It signed a contract to set up its SE Asia main office in Bangkok last week, Lim said. It is in talks with a Thai company to establish a joint venture with Lemon Healthcare owning a 49% stake, Lim continued. 

 

The company is also planning to set up a 100% owned subsidiary in San Jose, US, Lim said. The company’s US partner will be the LA-based Cha hospital that is the second largest hospital in LA, Lim noted.

 

Lemon Healthcare is also entering the China market with its 100% owned affiliate, Lim noted, adding that Seoul-headquartered Severance Hospital, which would be its partner in China, is setting up a hospital in Qingdao, China.

 

It is in talks with a Luxembourg-based company but has not decided whether it will form a joint venture, Lim noted.

 

Lemon Healthcare is in talks with a Japan-based healthcare company for a Japan market entry, Lim said.

 

The company is also looking for partners in the Middle East, Turkey, and Russia, Lim mentioned.

 

Lemon Healthcare could also consider an acquisition in the IT and/or healthcare industries if it cannot find a suitable partner, he said without elaborating.

 

Lemon Healthcare's Lemon Care Application is a customized service platform for medical facilities that manages everything from making appointments to submitting medical insurance claims and transferring e-prescriptions, according to its website. 

 

It does not provide medical practice and hospital treatment, he added.

 

Its business model is charging subscription fees to insurance companies, pharmacies, health content providers, EMR (electronic medical records) providers, and credit card companies, but it does not charge patients and hospitals, Lim explained.

 

The company owns three applications; one for patients (LemonCare), one for medical staff (LemonCare Plus) and another LemonCare App (Cheong Gu Ui Shin) is for users to research their medical history and a payment service. 

 

The company has developed a standard API extraction tool, called QAB (Quick API Builder), which is a patent-protected tool to interface with EMR (Electronic Medical Record) and HIS (Hospital Information System), Lim said.

 

The company collects data including EMR (Electronic Medical Record), EWR (Electronic Wearable Record) from IoT devices as well as wearable devices like ECG (electrocardiogram) devices and watches, Lim explained. Lemon Healthcare use the data for predictive medicine, he continued.

 

Approximately 80% of the top 80 hospitals in South Korea are using the Lemon Healthcare application, which means the top 10 hospitals in South Korea are using Lemon’s service, Lim mentioned. South Korea's Big 5 hospitals such as Asan Medical Center, Seoul National University Hospital, Severance Hospital, Samsung Medical Center and Seoul St.Mary’s Hospital use Lemon Healthcare’s platform, Lim added.

The company received the grand prize at the ICT Innovation 2019 from the South Korean Ministry of Science and ICT in October 2019 and another award for job creation by the Ministry of Science and ICT in December 2019.

 

Lemon Healthcare was spun off from Databank Systems, a South Korean IT company, in July 2017.

 

The company has 84 employees, of whom 80% work in R&D as of November 2020, Lim noted.

 

by Kate Park