Delhi-based venture capital fund HealthQuad and Belgium-based Kois Invest are among the existing investors (Picture: Medika Bazaar Twitter account)
Delhi-based venture capital fund HealthQuad and Belgium-based Kois Invest are among the existing investors (Picture: Medika Bazaar Twitter account)

Medikabazaar in talks to raise $28 million from Japan's Mitsui and others

  • The startup, which was founded in 2015 by Vivek Tiwari and Ketan Malkan, sells medical and hospital supplies to over 20,000 hospitals and clinics across 23 cities in India
  • The Series B funding will be used in hiring fresh talent, upgrading its technology base, and for expanding locally within more tier-3 and tier-4 cities

Bengaluru: Medikabazaar, an online business-to-business (B2B) platform for medical equipment and supplies, is in talks to raise 200 crore from a clutch of venture capital investors in Japan, Belgium and Germany, according to a top company executive.

The Mumbai-based startup, founded in 2015 by Vivek Tiwari and Ketan Malkan, sells medical and hospital supplies to more than 20,000 hospitals and clinics across 23 cities in India.

The current round has already seen commitments from existing investors such as Delhi-based venture capital fund HealthQuad, Japan’s Mitsui Sumitomo Insurance’s VC arm, Belgium-based Kois Invest and others.

“Around 50% of the capital in the current round will come from our existing investor base…and we will use a mix of both equity and debt routes in our ongoing Series B round," Tiwari said in a phone interview.

The funds will be used to hire people, upgrade technology, and expand to tier-3 and tier-4 cities, according to Tiwari.

Medikabazaar had last secured $5 million in a Series A round led by HealthQuad and Rebright Partners in October.

Today, mid-size hospitals and clinics usually deal with many suppliers across categories, increasing procurement costs. Tiwari said that around one-third of overall operational costs (opex) for hospitals and clinics are just procurement costs for medical supplies and equipment.

“This (opex costs) is apart from the separate capital expenditure (capex) required for purchasing medical supplies. We are currently helping reduce the overall cost of medical procurement by 15-20% using online solutions," said Tiwari.

Apart from inventory management, Medikabazaar is also working on shortening delivery times to within 24 hours for its B2B orders. It currently takes 2-3 days to complete a supply order, according to Tiwari.

“We currently have around 14 fulfilment centres all over India, and we are planning on increasing this to 44 in the next two financial years," added Tiwari.

Medikabazaar currently stocks over 250,000 categories of medical and hospital supplies, including devices, consumables, disposables, dental products and furniture.

The company also has customers in West Asia, Seychelles, Africa, Indonesia, Nepal, Pakistan and Bangladesh; although Tiwari said that the focus for Medikabazaar will remain tier-3 and 4 Indian cities.

“Medikabazaar is currently aiming for a 5X growth in terms of overall revenue; we are targeting revenues of $100 million in revenue for FY2019-20," said Tiwari.

Medikabazaar is one of several online B2B startups that are receiving investor attention. The number of registered B2B startups in India recently jumped four-fold to 3,200 in 2018 from just around 800 in 2014, attracting investments worth $3.7 billion in 2018, up from $797 million in 2014, during the period, according to a May report by consulting firm Zinnov.

Apart from B2B, supply and wholesale segments such as SaaS (software as a service) products, robotics, logistics and trucking have witnessed several notable deals in the past one year. Tiger Global, which largely focused on consumer Internet in India, has started investing in B2B startups in 2019. Since December, Tiger Global has invested in Facilio, Fyle and CleverTap, all of which operate in the B2B segment.

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