Seven-year-old healthcare platform Practo, today announced that it has closed $90M in Series C funding, led by Tencent, with participation from Sofina, Sequoia India, Google Capital, Altimeter Capital, Matrix Partners, Sequoia Capital Global Equities and Yuri Milner. With today’s round, Practo becomes the first Indian company to be a part of Altimeter’s portfolio. This is also Tencent’s first funding disclosure in an Indian company.
The funding will be deployed in expansion in other geographies, hiring and building product capabilities. Practo had earlier raised $30M Series B round from Sequoia India and Matrix Partners, in February 2015. The company had earlier announced acquisitions of Fitho and Genii to target preventive healthcare and the enterprise segment respectively. The 1500 member team plans to hire another 500 people by this year end.
Sofina brings the knowledge of European market which will be helpful for Practo for it’s future expansion. Similarly, though the company is not looking to enter China now, they are keen to learn from Tencent’s experience of building a scalable platform from a single messaging app. Yuri Milner has participated in this round in his personal capacity. Matrix brings in the expertise of being a part of building successful global SaaS companies. Shashank says,
Each of these investors bring unique value proposition on board. If you look at them they are complimentary to the others and together makes for one of the greatest set of investors.
Practo claims that its B2B software product (Practo Ray) is tightly integrated with its consumer offering (Practo Search) –creating a healthcare hyperloop that is connecting the entire healthcare ecosystem and is helping millions of consumers make better healthcare decisions.
Practo had grown over 6 times with nearly 200,000 healthcare practitioners on it and over 10M monthly searches by consumers looking to make the right healthcare choices. Practo also has more than 8000 hospitals on-board its platform. The growth is majorly fuelled by the focus on expansion and getting doctors on the platform.
In next 3-6 months, the company plans to expand product lines and continue its acquisition spree to encompass key healthcare segments across medicine, wellness and fitness, globally. It will expand from the current 35 Indian cities and three countries to over 100 Indian cities and 10 countries across South East Asia, Latin America, the Middle East and Eastern Europe. Shashank had earlier mentioned in an interview that the secret to low attrition at Practo is its growth. The company has a vision to touch 2 billion lives. Practo lives by their motto 'Do Great' which they have got trademarked as well.
Practo considers itself a number of startups inside a startup. Through their platform, they are targeting hospitals, diagnostics and the pharmacy industry. Shashank says,
Diagnostics alone is a $15 billion market in India and the overall healthcare industry is more than $100 billion.
The company has product for the doctor (Practo Ray), clinic and the patient (Practo Search). Practo marked its entry in preventive healthcare with the acquisition of Fitho in April 2015. Practo is running pilots with Uber and Ola as a part of its upcoming partnership. Shashank says,
Like you have your professional life on LinkedIn, social life on Facebook, we aim to be the go to platform for your health and well-being.
He shared that unlike many other cash intensive segments, healthcare has huge margins and also the industry placement is such that they don’t see any challenge in monetization. He further added that the company has mid-term plans to enable large scale transactions on its platform and even then, it’ll be heavily discounted/incentivized.
The healthcare segment is largely affected by government policies and Practo is constantly engaging and exchanging their points of view with the government. Shashank sees a great opportunity and at the same time, a massive responsibility as well, in the healthcare segment.
[UPDATE] Ministries are discussing the launch of e-pharmacies and e-prescriptions. Though nothing concrete has come out of the discussion, if this plan works out, it will be in alignment with Practo’s vision of getting the healthcare records online.
The estimated healthcare expenditure in India in 2013 was $96.3 billion which constituted almost 5% of the GDP. With a growth rate of ~12%, this number is expected to cross $195 billion in the next three years.
Practo already had a majority of the earlier funding($30M) in its banks when Series C was raised and Shashank is not sure how many more rounds of funding are going to be following up. Given the very nature of the healthcare industry, sustainability might not be as big a concern for Practo as it is for e-commerce companies.