Medtech manufacturer gets a 8x EBITDA boost

THE CLIENT

A healthcare startup building IoT-enabled pre-screening devices for rural and semi-urban India, at Pre-Series A stage with 40+ employees.

The company was contract-manufacturing IoT hardware devices and seeking $10M to finance R&D, working capital, and pan-India expansion. But its revenue model was built on a one-time product sale that left the real value on the table, while working capital was bloated by custom-hardware manufacturing lead times.

Investor conversations were stalling — the "hardware" narrative was hindering the impact story the founders wanted to tell.

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Industry

HealthTech / Medical Devices (IoT)

Stage

Pre-Series A · 40+ employees

Location

Rural & semi-urban India

Size

Seeking $10M raise

Our Offering

Business Model & Financial Strategy

the problem

A hardware story, capping a platform opportunity

Value-on-sale trap

A revenue model built on a one-time product sale only captured value once, leaving the real, continuing value behind.

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Capital inefficiency

Working capital was bloated by custom-hardware manufacturing lead times, demanding continuous capital just to sustain scale.

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Investor resistance

Investor conversations were stalling — the "hardware" narrative was hindering the impact story.

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THE SOLUTION

Can continuing usage value translate into continuing revenue?

PHASE 1

Develop a deep understanding of the

real business value

Because you can't reframe a story you haven't understood at its core.

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STAGE 1

Decode the latent value

The product could deliver continuing value and build a strong data moat, but the revenue model captured it only once through a one-time sale
Identified remote management capability as an untapped lever for a usage-based model

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STAGE 2

Stress-test unit economics

Working capital bloated by manufacturing lead times — profitability required scale that itself required continuous capital
Core question reframed: can continuing usage value translate into continuing revenue?

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STAGE 3

Align all stakeholders

Engaged management, investors, bankers, sales teams, and advisors to build consensus on the model shift
Built an ecosystem-based NPV model quantifying the gap between business-as-usual and the redesigned approach

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BEFORE

Revenue model was product-sale only Projected EBIT of 27% of $10M by Year 5 Unleveraged data moat from 10M+ data points

AFTER

Value-in-use model: every $1 now generates $8 over 5 years Projected EBITDA in Year 5 grew by 10x Funding needed dropped from ~$10M to ~$6M

PHASE 2

Re-engineer the business,

revenue & GTM model

Because a business model shift needs a go-to-market and product story that back it up.

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New business model

Franchise-led revenue

Designed a local franchise-led model with revenue share arrangements
Local partners offered an investment opportunity with guaranteed returns
Shifted from value-on-sale to value-in-use, aligning revenue capture with continuing product value

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Product roadmap redesign

Self-service by design

Added vernacular support enabling local hardware management with factored-in costs
Repositioned for 100% self-service using visual aids, minimal human interference
Designed for remote performance management, reducing ongoing operational cost

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Go-to-market redesign

Access-led positioning

Pivoted to activation through non-profits and healthcare bodies using 'access' and 'disease-management' positioning
Onboarded local champions to identify and activate entrepreneurial talent
Partnered with non-profits doing healthcare charity to enhance awareness

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PHASE 3

Architect a new

fundraise strategy

Because a new model deserves a capital structure that reflects it.

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Redesign the capital structure

Equity requirement dropped from ~$10M to $6M by unlocking balance sheet strength from recurring revenue
Layered in venture debt to drive higher IRR for equity investors

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Build the revenue thesis

Every $1 now generates $8+ over 5 years, fundamentally changing the investor narrative
Recurring revenue streams stress-tested against multiple scenarios for investor credibility

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Reposition & unlock optionality

Selected from 500+ applications for a coveted non-equity grant on the strength of the new model
Transformed investor conversations from "hardware risk" to "platform opportunity with data moat"

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the impact

engineering enterprise value across the organization

The Prequate difference

We operate as an indispensable extension of the Owner's office — providing the strategic financial horsepower to spot emergent problems, identify new growth avenues, and achieve the long-term vision.

We are not a consultant. We are a partner in enterprise value creation.

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TRANSFORMED

A one-time product-sale model

a recurring value-in-use platform generating $8+ per $1 over 5 years

ESTABLISHED

Projected Y5 EBITDA of 27%

10x growth, with PAT expanding from 17% to 37%

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REPLACED

$10M equity-only fundraise

$6M blended structure with venture debt and a non-equity grant secured

UNLOCKED

Hardware product narrative

platform story with 10M+ health data point moat as a long-term valuation driver