News & Analysis

Sydney startup Medical Channel raises $25 million to acquire competitor Community Network

- September 27, 2016 3 MIN READ
Medical Channel

Sydney startup Medical Channel has announced a capital raise of $25 million to acquire its rival competitor Community Network. The acquisition will position Medical Channel as one of the fastest growing digital health advertising platforms in Australia.

The raise was led by two high profile investment firms, Wingate Group and Sandbar Investments. The bulk of the $25 million raise will go towards the acquisition of Community Network, with additional funds allocated to expanding the startup’s network both locally and internationally.

CEO of Medical Channel Nazar Musa said the deal is a “watershed moment” for the startup that will help extend its lead in the space to more than 50 percent of the addressable market.

“The combined business is immediately profitable through the ability to offer both local and national advertising campaigns,” he said.

Launched in 2012, Medical Channel provides patients and doctors with health and wellbeing information displayed across advertising screens in medical waiting rooms. The advertisements target patients through interactive touch screens, using innovative point-of-care systems. The information provided on those systems helps viewers make more informed decisions on the care, services and products they may need.

Through the acquisition Medical Channel will now offer advertisers an audience of 6.25 million viewers per month, with those viewers having an estimated exposure time of 30 minutes – the approximate waiting time at their local GP. Advertisements on Medical Channel can target exact demographics to tailor suit information to a specific group of people. The startup looks at the age, gender or ethnicity of patients who frequent their local health provider to create highly targeted advertising.

According to Musa, research shows that consumers are more receptive to health-related messages when in a health-related space. Approximately 47 percent of people are more likely to believe an ad seen in a healthcare environment, with 41 percent being more influenced by the information they view in those environments.

Community Network has long been a rival of Medical Channel, offering digital signage solutions to over 1,100 venues across Australia in a range of environments including health care. Since 2001 the company has delivered digital advertising to medical centres, hospitals, supermarkets, and fitness centres.

By combining both businesses together, these digital advertising solutions will reach a greater audience. Medical Channel will acquire Community Network’s clients in Australia, the UK, Canada and Ireland, helping the startup to grow its network from 2,200 digital screens to more than 3,000 around Australia alone.

Medical Channel has also welcomed new members to its board, including Dr. Philip Wing, former APAC general manager for IBM Consulting Group; Darren Smorgon, managing director for Sandbar Investments; David Jackson, director of Wingate Group; and Tony Faure, digital media entrepreneur and investor.

On the investment and acquisition, Jackson saud Medical Channel has become a clear market leader with a national presence.

“This presents a unique platform for advertisers to reach consumers in a targeted manner and measure returns. The growth opportunity is underpinned by a continued focus on innovation and exceptional service delivery for our customers and partners,” he said.

In February this year Medical Channel also acquired Medical Media, a platform creating interactive content for doctors and other health professionals. The acquisition saw Medical Channel take on clients including the federal Department of Health, Blackmores, Novartis, Ramsay Health Care, Australian Hearing and Black Dog Institute.

“Health digital media is a booming industry globally, with the opportunity to segment markets into specific demographic, geographic and psychographic areas, and target risk groups for certain health issues,” Musa said.

Over the next year Medical Channel will look to further cement its position as market leader by integrating screen content with mobile to give patients instant access to more personalised information.

Musa said, “It’s an exciting time for Medical Channel. We have an effective, growing but well targeted out-of-home advertising solution. We’ve doubled our headcount, and recently moved into a new office. We’re now ready to tackle the next stage of our growth.”

Image: Nazar Musa. Source: Supplied.