Practo co-founder and CEO Shashank N.D. speaks about the firm’s new forays and revenue drivers
Healthcare and diagnostics platform Practo is betting on the secondary care market and plans to introduce surgery support to diversify its revenue and create new moats. The company, which was largely competing in the medicine delivery and doctor consultation space, is currently building the infrastructure for secondary healthcare, sharpening focus on chronic care and exploring acquisitions. In an interview, Practo co-founder and CEO Shashank N.D. spoke about the newer forays and revenue drivers. Edited excerpts:
What prompted Practo to enter the secondary care market?
Secondary care was a natural next step for Practo. The secondary healthcare market alone is worth close to $10 billion to $12 billion with almost 80% of surgeries in India happening under this category. We believe Practo can garner 5% to 7% market share in this segment. Over the past months, we launched Practo Care in six cities. Through Practo Care, we want to increase the quality of healthcare, while making it more affordable and accessible for users in tier-2, 3 and 4 cities.
To provide this, we have tied up with more than 100 hospitals to execute these surgeries and have partnered with 50 clinics in top six cities for patient walk-ins and checkups. These clinics also house our ‘Practo Care Experiential Centers’.
We have also onboarded close to 200 surgeons for this offering. These doctors have tied up with Practo to give exclusive hours, at present. By this calendar year, we will cover 30 cities and expand it to another 30 (cities) over the course of the next year. Further, utilization of hospitals and clinics have fallen post the pandemic, which allows us to leverage their infrastructure under Practo Care.
What are the newer verticals where Practo is now focusing on?
What is really interesting to us is how we can look to create much better subscription products for consumers so that their end-to-end needs are met. Whether we are talking about chronic users or episodic users; these are some things on the horizon. Given the focus on comorbidities in the pandemic, there is also a heightened focus on chronic care. This is an area of great focus for us.
Our business is divided into the software B2B business and the B2C business. Our B2B (business-to-business) continues to be profitable and cash-flow positive. Our B2C business comprises of the doctor consultation business, medicines deliveries and now surgery. And it is clear to us that our surgery business will be one of our largest businesses in the future. Close to 85% of our revenues come from our B2C business, with almost 60% of that being powered by the doctor consultation piece, currently.
Medicine deliveries contribute to almost 25% of our overall B2C revenues at present.
On a company level, we are operating at more than 50% gross margins at present. We are currently facilitating billion-dollar worth of spends on our platform annually. And we see this number only doubling in the next three years.
There was news about Practo undergoing a down round last year in terms of valuation. What were the reasons for that?
Valuations are market forces that go up and down with time, much like share prices. We raised some capital when the pandemic had just hit and will continue to do so as required. Healthcare is a long-term business and you have to be patient. It (valuation) is quite insignificant in the larger scheme of things.
Is Practo also actively looking at acquiring and taking inorganic avenues of growth?
We are keenly focusing on inorganic growth and are in conversations with multiple companies. The one area where we see active opportunities for us to acquire is the chronic care space where you will see us being very active. It is not an easy space and may take multiple years to get it right. We are keenly exploring organic and inorganic way to grow into the chronic care segment.
Is Practo also looking at an IPO in the future?
Practo is a strong brand, and going public is definitely on the cards. But I don’t have a timeline at present. But we are closely watching the market.