The Partnership between Glovax, IIX, Shujog and KKR

Glovax Biotech is a Manila-based integrated vaccine company that imports, distributes and retails vaccines. It offers critical supplies and services to low-to-middle-income residents at affordable prices. In 2014, Glovax partnered with KKR, Impact Investment Exchange (IIX) and Impact Investment Shujog (Shujog) – organizations that promote social enterprises – seeking support to scale its operations and quantify its social impact to attract third-party financing.

Paving the Path to Funding
Glovax’s founder and CEO, Giovanni Alingog, investment professionals from KKR and operational professionals from KKR Capstone (an independent team), and members of IIX and Shujog collaborated to implement financial, operational and social initiatives including:

– Creating a business plan that assessed the vaccine sector’s competitive landscape, reviewed pricing and sales opportunities, and identified key partners and networks. This validated the sustainability of Glovax’s model;
– Implementing a financial model that incorporates greater leverage and a revised timeline to scale and accelerate Glovax’s financing process;
– Drafting comprehensive investment documents that include key financial projections, opportunistic pricing terms, and an operational deep dive, and;
– Assessing social impact: Shujog created a framework to assess the benefit of Glovax’s vaccines and services delivered to communities, including improved health as well as secondary effects such as improved financial security and increased social mobility.

Putting Capital to Work
Glovax received a US$1 million credit line from BDO Universal Bank from which it will increase the number of vaccines for distribution from 400,000 to 500,000 and hire 10 additional staff to increase its market penetration.
Next, Glovax will undertake an equity fund raise. With this new funding:

– Glovax will scale its inventory purchases for its distribution business to meet its social impact goal of providing ~3.5 million doses of vaccines by 2018.
– The expansion will enable Glovax to provide a minimum of 50,000 additional doses of vaccines for free through its Low-Income Relief Unit.
– Create a technology-based partnership with doctors to expand the distribution of Glovax vaccines to new areas while increasing its own branded VaxCen clinics from 3 to 10.

The Keys to Success
Factors that contributed to this successful partnership include:

– The expertise of the KKR, KKR Capstone and IIX professionals that collaborated with Glovax to set financial targets, execute strategies, and create a bridge between the enterprise and additional capital;
– The impact-assessment expertise of Shujog, which enabled Glovax to measure its impact on the community and find opportunities to enhance this;
– The entrepreneurial spirit and strong social mission of Giovanni Alingog, whose openness to new ideas enabled Glovax to optimize its expansion potential for the good of the community.

Click to view a video case study on Glovax and the IIX and KKR technical assistance project.