Practo Technologies cuts 10% of workforce, explores new revenue engines
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Bengaluru: Healthcare technology start-up Practo Technologies Pvt. Ltd has pruned its workforce by about 10% even as the company is exploring new revenue engines by partnering with insurance firms, medical devices manufacturers and pharmaceutical companies.
The company said in an email response on Friday that it let go off 150 of its 1,500-odd employees.
“Yesterday, 150 of our colleagues left the company to pursue opportunities outside. This is a combination of natural redundancies that emerge as we integrate our 5 acquisitions and evolve our businesses, as well as the performance required for the next phase of Practo’s growth. In line with our policy, we provide employees with two months’ pay, employment and outplacement services to help them find them their next great opportunity. We continue to rapidly grow our consumer and enterprise businesses and will continue to hire talent across the board,” a company spokesperson said in an email response.
Practo has raised $179 million since its inception in 2008, making it by far the most well-funded home-grown healthcare start-up. The company counts Sequoia Capital, Matrix Partners, Tencent Holdings Ltd, Sofina, Altimeter Capital, Google Capital, RSI Fund, owned by Japan’s Recruit Holdings Ltd, New York-based Thrive Capital and Russian venture capital firm ru-Net as investors.
During its last fund-raise, a $55 million round in January this year, Practo was valued at $600-650 million.
The Economic Times reported the development earlier in the day.
Currently, Practo allows consumers to search for doctors and diagnostic labs, book appointments, consult doctors online and order medicines. The company claims to have facilitated 45 million appointment bookings in FY17. As many as 7 million health records were shared on its platform during the same time.
A huge consumer traction, however, does not necessarily translate into revenues. The company earns revenue from a suite of software for doctors, clinics, hospitals and diagnostics labs on a software-as-a-service model apart from letting institutions advertise on its platform. Consumers don’t pay for searches and appointment booking, while listing on Practo is free for doctors.
In the year ended 31 March 2016, Practo clocked revenue of Rs165.14 crore as against Rs29.73 crore a year earlier. Net sales stood at Rs156 crore. Losses widened to Rs64.61 crore from Rs12.85 crore a year earlier, according to documents available with the Registrar of Companies.
About Rs133 crore of sales came from Practo Pte, the Singapore-based company that holds about 93% stake in Practo Technologies, for providing “software development and support services”, as against Rs23 crore a year earlier. This implies that actual business revenue grew four times to Rs23 crore as against Rs6 crore in FY15.
Practo aims to develop a platform with multiple stakeholders on board that will not only facilitate real-time exchange of information and health records between patients and healthcare providers, but also help businesses such as insurance firms, medical device makers and pharma companies expand their user base as well as gain intelligence on consumer behaviour by leveraging Practo’s consumer traction.
“Of course, the platform will create newer revenue engines in the long term. Advertising and global are the short and medium-term revenue drivers but the platform is a strategic step in the long run,” co-founder and chief executive Shashank N.D. told Mint in an interview on 5 April.
Apart from India, Practo operates in the Philippines, Singapore, Indonesia, Malaysia and Brazil. The company claims to have witnessed a 129% growth in appointment bookings in international markets in 2016 as against 2015.
Not only Practo, but large consumer Internet start-ups such as Zomato Media Pvt. Ltd, Tinyowl Technology Pvt. Ltd, now acquired by Roadrunnr, Snapdeal (Jasper Infotech Pvt. Ltd), have laid off employees as costs ballooned and fresh funds were hard to come by, and investors became increasingly cautious with their bets.