What can a crustacean strolling on the seafloor do for a border-patrolling military man? Be a source of protein you’d imagine. As important as that is, there is some - thing else perhaps more valuable. Turns out those shrimps and crabs can provide a material that can make a difference in a life-and-death situation.
The material is, in fact, the building block of a crustacean’s defence—its shell. The exoskeleton of these living beings is made of a substance called chitin, which when treated chemically yields chitosan, a substance that stops bleeding and helps tissue regeneration. Thus, chitosan can be used to make bandages, and because chitosan gets sticky when wet, these bandages are more effective than cotton-made ones .
The good news for military men and women: They don’t have to know the science because Leo Mavely does. Mavely is the founder-CEO of Axio Biosolutions, a Bengaluru-based company that makes these shrimp bandages. Axio’s customers include the Indian Army, the Border Security Force (BSF), and security forces in West Asia and Europe. Though the BSF was among his early customers, Mavely says a major milestone was when the army ordered his bandages—called Axiostat—as India and Pakistan confronted each other in 2016. “After that, we became the de facto product for all the Indian armed forces in the country,” says Mavely.
That may well be the case, but Axio’s revenue, according to Ministry of Corporate Affairs records, was just a modest Rs 5.2 crore in the financial year ending March 31, 2017. That can only mean that the army, which has well over a million active soldiers, is not ordering Axiostat in large numbers.
Also, chitosan bandages are not an Axio innovation. The application of chitosan in haemostatis was put forward by academics well before Axio’s inception in 2008 and was even demonstrated by some companies. In fact, the U.S. military purchased such bandages in 2007 from a company called HemCon—later acquired by Port - land-based Tricol Biomedical. But Axio is the only company in India in the space—it even holds a patent here for the process of making such bandages.
The concept of chitosan bandages may not be unique, but that doesn’t under - mine Mavely or Axio. That a 22-year-old Mavely, fresh out of college with an ap - plied biotechnology degree from Rohtak’s Maharshi Dayanand University, had the conviction to start a venture such as this in a country with many big pharma companies says a lot about him. That he persisted with it despite the necessary clearances coming his way only in 2011 only adds significance.
All of that perseverance has given him a first mover advantage in India. Axio has also obtained clearance from the European Commission. “The reason why we went out for approval in Europe was because there was no clear-cut guide - line for a product like this in India,” says Mavely. This, he says, changes the negative perception doctors have of Axiostat as “they feel the Indian quality systems are not good enough” .
Changing the perception is crucial for Mavely, as Axio is looking beyond security forces. He says he has a sizeable order from private hospitals and is pitching Axiostat to be included as a first-aid essential to various automotive companies and public transport authorities. The company says its share of revenue from security forces has come down from over 70% to around 40% .
Mavely says hospitals hitherto were largely using cotton gauze to prevent bleeding. “We proved to them that by using haemostatic agents you could reduce blood loss which is crucial when there is lack of availability of blood,” he says.
Axio maintains a dedicated sales team to cater to security forces as the market is “highly fragmented”. “While the Indian Army has a million and a half soldiers, not all of them are on the war front. Therefore, we have a dedicated defence sales force spread across the country to identify where our products are needed.”
Axio has set up a plant in Ahmedabad, which crucially got U.S. Food and Drug Administration approval, thereby allowing him to sell his products in the U.S. Mavely says the plant can produce a million units of Axiostat a year—the company has so far sold close to 400,000 bandages since 2008. Mavely says he has also entered into manufacturing tie-ups in Europe that can be a “back-up if supply starts to get constrained”.
“Our focus is to become a global brand from India in the wound-care segment, something which has never been done,” says Mavely. He adds that he is aiming for a revenue of Rs 100 crore by 2020—25 times the current revenue, or a growth rate of close to 2,000% in three years. It is, to put it lightly, an ambitious target .
Mavely also says he expects to break even in the next 18-24 months. For context, Axio recorded a loss of nearly Rs 2 crore in FY17. “Being a product manufacturing company, we have to make investments,” says Mavely.
Axio’s financials and Mavely’s ambitions don’t add up. But there is another side to the startup that may bode well for inves - tors. One of its early investors, GVFL Ltd, exited with a seven-fold return when Axio received fresh investment of $7.4 million from Accel Partners, IDG Consumer Mar - ket, and the Ratan Tata-backed UC-RNT Fund this year.
Perhaps these investors foresee a similar exit if Axio grows to become a significantly large company on its own, or maybe they see Axio’s experience in a niche market as an attraction for bigger companies for an acquisition. It is a gamble .
And if things don’t go well, inspiration is not hard to find—some crustaceans are known to swim against the current .
(The article was originally published in 15 March-14 June special issue of the magazine.)
