Entrepreneurial Veterinary Clinic Rollup in Chile: Lessons from Latam Vet

In the world of entrepreneurial acquisitions, Francisco Del Rio and Diego Silva are pioneering a unique venture in Chile. Their company, Latam Vet, is consolidating veterinary clinics in a market where such rollups are virtually unheard of. This article delves into their journey, challenges, and the lessons they've learned along the way.

The Genesis of Latam Vet

Francisco Del Rio, with a background in engineering and finance, was inspired by his Harvard classmates who had successfully rolled up veterinary clinics in the US. Despite having no prior experience in the veterinary industry, Francisco saw an opportunity to replicate this model in Chile.

Diego Silva, on the other hand, had a passion for dog training and breeding. After completing his MBA at Duke and securing a job offer at a veterinary tech company in Boston, he was introduced to Francisco's vision for Latam Vet. Intrigued by the opportunity, Diego made the bold decision to reject his job offer and return to Chile to join forces with Francisco.

Challenges in a New Market

Unlike the US, where entrepreneurial acquisitions are more common, Chile presented unique challenges:

1. Lack of awareness: Most veterinary clinic owners in Chile had never considered selling their businesses to outside investors.
2. Trust issues: Cold calling potential sellers proved difficult, as many were skeptical of the proposition.
3. Limited access to capital: Raising funds for acquisitions was challenging due to the novelty of the business model in Chile.
4. Operational improvements: Many clinics lacked basic business management practices, requiring significant upgrades.

Overcoming Obstacles

To overcome these challenges, Francisco and Diego employed several strategies:

1. Building trust: They focused on personal connections, meeting clinic owners face-to-face and explaining their vision.
2. Tailored approach: They learned to understand each owner's motivations and tailor their pitch accordingly.
3. Retaining ownership: Their model allows clinic owners to retain a significant stake (30-40%) in their businesses, easing the transition.
4. Operational expertise: They implemented modern management practices, including CRM systems, inventory management, and performance metrics.

Financing the Venture

Financing Latam Vet proved to be a significant challenge. Initially, Francisco and his original partners used personal savings and loans to acquire their first clinic. As the business grew, they sought outside investors, primarily family offices, who were more aligned with their long-term vision.

To attract international investors, they established Latam Vet as a Delaware C-Corp, opening doors to US and global investors.

Operational Improvements and Value Creation

Latam Vet's strategy for creating value in acquired clinics includes:

1. Implementing veterinary management software: Digitizing medical records and client data.
2. Economies of scale: Negotiating better prices with suppliers and distributors.
3. Employee benefits: Introducing insurance and other perks to attract and retain talent.
4. Inventory management: Implementing systems to reduce waste and improve efficiency.
5. Performance metrics: Creating KPIs and dashboards to track business performance.
6. Variable compensation: Introducing incentive-based pay structures to motivate staff.

Expansion Plans and Vision

Latam Vet aims to acquire 100 clinics across Chile, Peru, and Colombia within five years. Their immediate goal is to reach 15 clinics by the end of the next year. The company's long-term vision extends beyond mere consolidation:

1. Building an ecosystem: Creating a comprehensive network of veterinary services across Latin America.
2. Improving veterinary medicine: Investing in education and technology to enhance the quality of care.
3. Enhancing customer experience: Focusing on pet owners' needs and preferences.

Lessons for Entrepreneurs

Francisco and Diego's experience offers valuable insights for entrepreneurs considering similar ventures in emerging markets:

1. Adapt to local conditions: Understand the unique challenges and opportunities in your target market.
2. Build trust: Personal relationships are crucial when introducing new business models.
3. Think long-term: Align with investors who share your vision for sustainable growth.
4. Focus on value creation: Implement operational improvements that benefit all stakeholders.
5. Be prepared to educate: Both potential sellers and investors may need to be introduced to the concept of entrepreneurial acquisition.

Conclusion

Latam Vet's journey demonstrates the potential for entrepreneurial acquisitions in markets where such models are not yet common. By adapting their approach to local conditions, building trust, and focusing on long-term value creation, Francisco and Diego are pioneering a new path for consolidation in Latin America's veterinary industry. Their experience offers valuable lessons for entrepreneurs looking to pursue similar opportunities in emerging markets around the world.

Article created from: https://www.youtube.com/watch?v=-bjCtfeb_JQ