Is Everything Alright With Tech HighFlyer Practo?
India has made rapid progress in digital transformation of the economy.
The digital adoption index has been growing at a rate of 90% annually. The healthcare sector in India has adopted digital transformation to improve quality and accessibility.
The Indian Healthcare market is estimated to grow at a CAGR of 23% to USD 280bn by 2021 from USD 100bn in 2015.
Based on type, the digital healthcare market is segmented into telehealth, mHealth (mobile health, a term used for the practice of medicine and public health supported by mobile devices), electronic health records/electronic medical records (EHR/EMR), and others (remote diagnostics and healthcare analytics).
The mHealth segment is estimated to dominate the market, with ~40.64% of revenue share in 2024, followed by the telehealth segment. The country’s healthtech market has attracted the attention of investors and corporate houses.
Digital health start-ups are now an integral part of the Indian healthcare ecosystem.
One particular startup generated a ton of publicity and nearly a quarter-billion in venture funding but has been unusually quiet recently, Practo.
Practo was founded by two senior engineering students in 2008 and is considered as one of the first to enter the flourishing health-tech market in India.
Practo's business model is centered around creating an ecosystem that brings together all the patients, doctors, pharmacy, insurance and hospitals to one forum.
Practo's revenue generation is driven by the MATPA model: marketing, appointment, treatment, payment and analytics.
The website, Practo.com, allows the patient to search for doctors online and schedule an appointment with them. Practo Ray is the company's main product, which is offered as a subscription-based service where doctors pay $9.35 or more per month.
The company claims to have over 200,000 doctors, 10000 hospitals, 8000 diagnostic centres and 4000 wellness and fitness centers on its platform, in addition to facilitating 10-12 million monthly searches.
However, a huge consumer base does not guarantee revenue generation.
The company is primarily relying on revenue from a stack of softwares for doctors, clinics and hospitals on a SaaS model and advertisements on its platforms. The ability to generate revenue is hampered by the fact that consumers do not pay for searches and appointment booking.
Since 2017, the HealthTech trailblazer has been unusually quiet.
After raising $250MM+, Practo has barely raised any new funds.
The company has shown no substantial PR efforts nor any big advertising campaigns. Reports of senior overturn and fire sales have added noise, indicating potentially deeper issues.
The company has to redefine its product strategies or add new solutions. Currently, it's more inclined towards generating prescription notes and making appointments.
Big data phenomena is providing excellent opportunities in several areas of health analytics and medical image computation.
Embracing the machine learning approach to solving problems related to hospital management, the patient care system, hospital revenue cycle management, and data repositories could keep the company growing in the long run.
Written by Mithilesh Kumar
Edited by Alexander Fleiss, Calvin Ma, Gihyen Eom, Pavan Nagaraj & Michael Ding