Partnering with F.INSTITUTE, Bilihome successfully attracted investors and created realistic financial scenarios for its development, certification, and product launch phases. F.INSTITUTE supports Bilihome’s financial services, including accounting, financial modeling, and the role of CFO, payroll administration, and partially subsidy advisor.
“Our biggest lesson learned is that finding the right person or persons to support your financial goals is key. That means someone familiar with the medical domain, who truly understands your business drivers.”
Margret Huenerbein, CEO Bilihome
MedTech start-up Bilihome aims to transform the treatment of jaundice. This common and usually harmless condition that afflicts 60 percent of all newborn babies causes yellowing of the skin and the whites of the eyes. Ten percent of newborns require hospitalization, during which they are separated from their parents. The babies are confined to an incubator and treated with blue-light phototherapy to prevent potentially irreversible neurological damage. Bilihome aims to introduce a treatment method using the same basic technique, but without the parents and baby being separated. The treatment can simply take place in the comfort of their own home, reducing stress and anxiety.
Raising first funding
Initially, a young father of a jaundiced patient took the initiative and attracted an angel investor to nurture his idea. A major challenge was that none of the team members came from the medical device industry. In mid-2019, together with NLC as an incubator, the team created Bilihome. Margret Huenerbein started as CEO of Bilihome in 2020, when the first funding was needed for the concept phase. Margret: “Ten percent of the 40 million babies born each year creates a lot of business potential, but the reality is that investors will not invest if there is no sound business case behind your idea. Our investors required a better business case with a realistic budget on which we can operate until the next inflection point. Since we did not have the right financial capabilities in-house, they recommended that we get in touch with F.INSTITUTE.”
F.INSTITUTE’s association with Bilihome started in September 2021. F.INSTITUTE took on the role of fractional CFO and helped with the financial modeling for the different launch phases – from product launch to scaling up – and identifying the budget requirements and main cash flow risks. This is a critical phase for start-ups, as it requires the right balance between having a realistic amount of money and a healthy ROI for investors.
“F.INSTITUTE was a perfectly sensible solution to pick up these challenges,” says Margret. “They really know how all of the numbers play together. They have since been part of our weekly meetings and we really see their CFO as a team member, which is really nice. Since he comes from a start-up environment, he has good insight and a broad view, which enables him to ask critical questions, for example, from the regulatory point of view. F.INSTITUTE really helps us at specific moments when we need financial expertise, such as our financial modeling and in our contact with investors.”
Preparing for different scenarios
Besides the fractional CFO, F.INSTITUTE also handles all of the accounting, bookkeeping, and monthly reporting for Bilihome. Margret: “For us, as a start-up, the added value of F.INSTITUTE is working with experts in their field who have a strategic view of the financial health of the company. If we are not financially healthy, our start-up will fail. I consider F.INSTITUTE as a partner who accompanies us on our journey, takes risk, and with which to build a trustworthy relationship with a proactive approach and open communication. That is very valuable to us. Lars has such a broad and critical view on all topics that matter most for a MedTech start-up. Because of this, for example, we can also act much more proactively towards our suppliers.”
At the end of the development phase, Bilihome will hand over its technical product file to the registration authorities. A challenge is that the approval process for a new medical device can take up to nine months. This makes it uncertain exactly when production can start to generate sales revenues. Margret: “A very important step for us was that F. INSTITUTE did some alternative financial modeling and created two different scenarios with two different budget plans.”
The outcome of the financial modeling was a new timeline with a realistic budget. Based on Bilihome’s first equity financing round, F.INSTITUTE also helped to create scenarios for a financing solution under worst-case market-entry conditions. F.INSTITUTE was heavily involved in the process of applying for an Innovation Credit from RVO. This loan is intended to remove technical risks during the development phase, making Bilihome a financially attractive company to all current and new investors.
Bilihome hopes to launch its product in the Netherlands, Sweden and Germany. Margret: “Introducing a new medical device is never easy. We need to create awareness, because there is an existing treatment, but we are sure that acceptance will come with the ease of implementation. My aim is to continue as we are in the near future, to stabilize Bilihome as a company. I see F.INSTITUTE as part of the team and a financial guide. Our expertise is in areas other than finance. Having an expert eye on the financial side removes a lot of stress. F.INSTITUTE can take a holistic approach towards our day-to-day matters and educate the team on the basics of financial health. They can also explore other financial tools, such as a credit or a bank loan to finance production, which is in the interest of our company and our shareholders.”