Pristyn Care suspends founders of Lybrate

Healthtech platform Pristyn Care has suspended Rahul Narang and Saurabh Arora, the founders of Lybrate Inc., a day after the duo served a default notice demanding outstanding payment resulting from Pristyn Care’s acquisition of their company in June 2022, two people aware of the development said on condition of anonymity.

Tiger Global-backed Pristyn Care, which runs a network of hospitals and clinics through partners, had acquired Lybrate to enter the primary-care segment. While the deal size was not disclosed, it was said to be $20-30 million, including payments to other investors of Lybrate, such as Nexus Venture Partners, Tiger Global Management, and Ratan Tata’s RNT Associates. Both founders joined Pristyn Care following the acquisition.

While the investors received the proceeds from the deal, the two founders received only a part of their share, with the rest to be paid in two separate tranches. One tranche was due on 1 June, one of the people cited above said. The final tranche will become due in 2024.

“Nearly 60-80% of the payment owed to the founders has not yet been paid,” one of the people cited above said.

On Tuesday, Arora and Narang served a notice to Pristyn Care’s operating entity GHV Advanced Care alleging the company had failed to acquire the second tranche of shares in Lybrate, as agreed in the original share-purchase agreement, the people cited above said.

Narang and Arora did not respond to emails on Wednesday.

“Pristyn Care has and shall continue to act in accordance with the contractual terms and conditions. Pristyn Care has not defaulted on any of its contractual obligations. At this point, it would be inappropriate to comment on the matter,” a spokesperson said.

Pristyn Care achieved unicorn status in April 2021 in a round led by Tiger Global Management. Its other investors include Peak XV Partners (formerly Sequoia Capital India), Hummingbird Ventures and Epiq Capital. At that time, the company said it had raised a total of around $150 million from external investors.

The company laid off 45 employees in March citing non-performance, a spokesperson said at that time.

The startup ecosystem has been going through a funding crunch, with multiple other companies letting go of staff to save costs.

Pristyn Care offers tech-enabled support to patients booking surgeries across centres in Mumbai, Pune, Delhi, Bengaluru, Hyderabad, Chennai, Kolkata, and some tier-2 cities. It offers medical care in 12 surgical categories, including general surgery, ophthalmology, ENT, urology, and gynaecology.

Pristyn Care reported the revenue of ₹96 crore in the year ended 31 March 2021, on a loss of around ₹64 crore. It has not yet filed its FY22 financial statements.