In this article, we take a closer look at:
- Inclusive retail optical as a new impact industry set to increase access to high-quality, affordable eyeglasses for the 550 million people living with poor vision in Africa.
- How Lapaire recently secured a US $3 million investment to expand its inclusive retail optical business in Africa.
- Lapaire’s approach to reach this untapped market through innovative technology and affordable eyewear options.
- What enabled Lapaire to scale, including the support they received from EYElliance.
Over one billion people currently live with poor vision that can be corrected with a simple pair of eyeglasses. 550 million of these people live in Africa, where routine, reliable access to high-quality, affordable glasses is limited.
Historically, African customers could only access eyecare services via nonprofit or aid-driven programs distributing very affordable eyeglasses, often in rural settings or via traditional optical players and optometrists who sell premium products with price points which are unaffordable for most.
Though aid agencies and nonprofits have traditionally been at the forefront of meeting the need for eyeglasses in Africa, the private sector is a crucial part of the solution—which has, till recently, seemingly left millions of consumers behind.
But now, a new kind of retail optical business is entering the market. They recognize the huge opportunity for both revenue and impact in providing access to eyeglasses for the millions of underserved lower- and middle-income consumers in Africa with poor vision.
We recently sat down with Jérôme Lapaire, Founder and CEO of Pan-African healthcare startup, Lapaire, to discuss the inclusive retail optical sector as a new impact industry brimming with opportunity, and celebrate his recent success in securing a US $3 million investment for his retail optical business. Lapaire has been part of EYElliance’s portfolio of inclusive optical businesses since 2022 and formed part of the second cohort of EYElliance’s Inclusive Optical Scale Out Program.
Lapaire recently raised their series B investment with lead investor, Investisseurs & Partenaires (I&P), a pioneering impact investment group funding start-ups in Sub-Saharan Africa, and participating investors including AAIC Investment, FINCA Ventures and Beyond Capital Ventures. Lapaire's series B equity round will allow them to scale to more than 450 branches across new and existing markets, purchase new testing equipment, and expand production facilities. The company's ambitious goals include growing to 500 stores by 2027 and launching into three new markets such as Democratic Republic of the Congo, Ghana, Guinea, Nigeria, or Tanzania.
Why did you make the decision to start a business in the retail optical sector in Africa?
“Nobody was actually focused on people earning $300, maybe $500 in African cities,” says Swiss-born lawyer and entrepreneur, Jérôme Lapaire. “Billion dollar companies like Zara, H&M and IKEA were built on serving this middle class. So I asked myself, can we do the same in the eyeglass industry?”
In 2018, Jérôme Lapaire founded Lapaire, a eyecare company that aimed to bring clear vision to lower- and middle-income and price-sensitive consumers in Africa by leveraging accessible, innovative technology to provide free vision tests and affordable eyewear options.
“I knew nothing about eyeglasses. I don't even wear eyeglasses myself, so I had to do my research.” admits Lapaire. Inspired by US-based Warby Parker and Lenskart in India, who both apply a lower priced model than what was traditionally available, it was a report by EYElliance that finally moved him to action.
“I came across an EYElliance report published in conjunction with the World Economic Forum, Eyeglasses for Global Development: Bridging the Visual Divide and it confirmed everything that I read on the scale and solvability of the issue. On top of that, it highlighted innovative companies that were producing new machines to make vision screening easier and more accessible. And I was like: this is perfect. We have a problem. There is a market. We have a solution. So, let's just start!”.
You saw a gap in the market, but what was your approach to solving it?
“We focused on removing the first barrier to entry: lack of awareness due to costly eye tests. Instead, we took inspiration from Mexican optical startup, Ver De Verdad, and decided to offer free eye tests.”
Lapaire further studied the Ver De Verdad business model as part of EYElliance’s Inclusive Optical Scale Out Program—an inclusive retail optical acceleration program which supports Lapaire to de-risk new market entry by employing the Scaling Methodology of the largest and most successful university-based social enterprise accelerator in the world, Miller Center for Social Entrepreneurship.
“Secondly, we looked at ride hailing companies like Uber and the transparency they brought to their industry. When you book your trip, you know the price. In the eyewear industry there was a big problem with lack of transparency. People didn't want to go into an optical shop because they had no idea how much it would cost them.”
“We took a transparent approach. We assigned a single price which included all frames and lens powers. Though we may lose money 5% of the time due to overpowered lenses etc., 95% of the time we would be profitable.”
Tell us about the different routes to market that you tested?
“In most major African cities, transportation is costly and lengthy. So we came up with a way to bring our services to the people. We piloted home testing where people would book appointments online. We would go to their home and do the testing there with a portable testing machine. But in the end we realized this route to market was too time consuming and resource intensive to scale profitably.”
“We also tested a Business-to-Business (B2B) model which proved more successful. We leveraged companies that have stronger financial means (than price-sensitive customers) to pay for their employees' eyecare services via workplace testing and dispensing of eyeglasses.” Though the model continues to work well, the relatively small size of the formal economy in many African countries limits scalability,” explains Jérôme.
Eight out of ten workers in Africa are in informal employment, so in order to scale effectively, Lapaire would also need to employ a Business-to-Consumer (B2C) approach. Lapaire now operates 58 B2C retail optical shops across six African countries with more than 330 employees, conducting over 300,000 vision screenings to date.
Congratulations on recently securing your series B investment of US $3 million. Tell us about the process of securing this investment?
“On the surface, eyeglasses seem to be a ‘sexy’ business for investors. The impact is clear. The economics are healthy: there is clear potential for profitability and scale. However, as soon as you get into secondary discussions with investors, you realize that a lot of investors in Africa are tech focused, and our model is a human resource intensive one. Our reliance on one skill set, that of optometrists and opticians, scared some investors.”
In the social impact investment space where inclusive fintech, healthcare, agri and education are desirable sectors for investment, some investors felt Lapaire was potentially too retail-oriented to be considered an impact healthcare investment, explains Lapaire.
“The biggest challenge for us was to find a lead investor. Lapaire doesn’t fit neatly into the thesis of one investor. I always thought that the fact that we operated widely, in both East and West Africa, would be a big plus, but most funds are regional. So the fact that we were a Pan-African player actually limited the number of investors open to funding us.”
Information asymmetry also proved to be a barrier in both attracting investors and setting up the business terms for the deal, says Lapaire, “At a basic level, all investors understand that selling eyeglasses is impactful, but it is an industry that many investors don't understand intimately. We know this industry very well, so there was a fair bit of investor education that needed to happen.”
Central to securing funding was the need for investors to understand how impact is measured in the sector, “Investors know that it's an impactful business, but they don't know how to measure it.” explains Jérôme. To support this, EYElliance engaged with potential investors in a neutral capacity on how we and others in the eyewear sector measure impact, including metrics like: number of first time wearers, number of purchasers who bought for the first time in the last 3 years, number of low income customers, as well as longer-term outcomes such as productivity gains and education impact.
This ability to package the business’ impact would go on to positively influence discussions with funders, Jérôme explains; “It has been really helpful working with EYElliance, because they know how to package impact. This helped our discussions with Development Finance Corporation (DFC) and supported us to present to other funders.”
As part of the EYElliance Optical Scale Out Program you worked closely with our Sustainable Finance team who provided you with technical assistance and support both during and after the program. Tell us how this support impacted your business?
Introductions to investors and industry players proved to be at the top of the list for Lapaire. “Getting introductions to investors has been so important. When you are an entrepreneur cold emailing investors from outside of the core sector, it often feels like nobody is going to answer you. The recommendations and introductions we received from EYElliance were really helpful. I would say this is probably top of the list to any entrepreneur. EYElliance also introduced us to a lens supplier in India. All of these introductions are very helpful.”
For Jérôme, like many entrepreneurs, working on the business is often more challenging than working in the business. EYElliance’s program provided him with the ability to step out of the business. He explains, “EYElliance’s inclusive optical scale out program allowed me to step out of the day to day running of the business and rethink how to present it to the outside world. I know the business because I run it every day, but I learnt that I need to present it in a clear way that makes it enticing for investors. I think this was very helpful and even though we were more investor ready than some other businesses in the program, it was still a great opportunity to have the space to take a step back and reflect on how to present the business.”
The value of EYElliance as a thinking partner also ranks highly on Jérôme’s list. “I reach out to EYElliance on a regular basis. Sometimes just with a question, sometimes with a crazy idea. Just being able to bounce ideas off people that are outside of the business, that you can trust, that you know won’t steal your idea, is so important. EYElliance has a global view and industry knowledge. I think this is helpful because if I want to do something a specific way, they will know someone else in the industry or a similar model that I can get inspiration from.”
A new impact industry brimming with opportunity
To close our discussion, Jérôme highlighted the vast potential of the inclusive retail optical industry, specifically in Africa, as a middle ground between healthcare impact investment and the more rigidly commercial retail investment. Entrepreneur’s like Lapaire balance impact investors' expectations of business growth and profitability with social responsibility and impact for millions.
If you want to learn more about this new impact industry and get involved in the inclusive retail optical sector, get in touch with EYElliance's Sustainable Finance team by contacting Tapfuma Musewe at tapfuma@eyelliance.org.
Read more on the topic here:
- https://www.howwemadeitinafrica.com/entrepreneur-capitalises-on-africas-demand-for-affordable-eyeglasses/167819/
- https://www.prweb.com/releases/beyond-capital-ventures-announces-investment-in-lapaire-301985745.html
- https://techpoint.africa/2024/01/11/lapaire-eyewear-startup-3m-funding/
- https://www.kenyans.co.ke/news/96089-swiss-investor-jerome-lapaire-hail-kenyans-catalysing-growth-his-eyewear-business
About Lapaire
Since 2018, Lapaire has been revolutionizing access to eye care in Africa by making trendy eyewear accessible to all! Over 300,000 people have already trusted the Lapaire expertise to test their eyesight in Côte d’Ivoire, Burkina Faso, Mali, Togo, Benin, and Uganda. For more information on Lapaire, visit our website www.lapaire.africa
