Can Practo Take The Next Big Leap Forward - Livemint

7/20/2017 Can Practo take the next big leap forward?
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Last Published: Tue, May 16 2017. 04 29 AM IST
Can Practo take the next big leap forward?

Practo will have to step up its efforts to ensure large-scale acceptance of digital healthcare to secure strong growth and boost investors
interest in the company
Sayan Chakraborty
Practos early team ( from left) Siddharth Aggarwal; Shashank N.D., founder and CEO; Praveen P. Sakrii; Abhinav Lal, founder and CTO; Manoj Kumar; Aditya
Bhat and Siddhartha Nihalani. Photo: Hemant Mishra/Mint
Bengaluru: Like any other child in a household of government employees, Shashank N.D. would have given in to the glitters of a
plum job. After all, the start-up wave was yet to hit the Indian shores. A golden handcuff would be reassuring in the least. A peoples
person, who would be mostly spotted outside the classroom in school, either rehearsing for a play or planning excursions, Shashank
did not resent the idea either. But then, that was not to be.
I ended up topping my school (National Public School, Rajajinagar) in math and computer science in class XII board exam. I studied
hard in the last one year before the exams. Thats how I got into National Institute of Technology (NIT), Surathkal (in Karnataka).
That is where I came to know about entrepreneurship. Till then, I didnt even know the word, says Shashank.
Mayawatis resignation from Rajya Sabha accepted SoftBank CEO Masayoshi Son sees data, AI as key to future advances
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7/20/2017 Can Practo take the next big leap forward? - Livemint
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Simplicity and common sense, Shashank N.D. maintains, are the cornerstones of Practo
It was in college that Shashank came across Pirates of Silicon Valley, an acclaimed movie that documented the evolution of Apple Inc.
and Microsoft Corp. A coder at heart, Shashank was intrigued. Soon, he was working on setting up an entrepreneurship cell at NIT,
Surathkal.
The spark that ignited the entrepreneur in Shashank was, however, an address by Ajit Balakrishnan, founder of Rediff.com, at an
event organized by a business school in 2006. He recalls how the audience, turned off by jargon-laden speeches by corporate
executives, snapped to attention when Balakrishnan took the podium.
He spoke almost the same things, but he spoke with such simplicity, not using jargon and stuff, just common sense. Thats when I
realized that common sense and simplicity play a big part. You can build really good companies being simple and running businesses
with common sense, says Shashank.
Mayawatis resignation from Rajya Sabha accepted

Abhinav Lal, co-founder of PractoTechnologies. SoftBank CEO Masayoshi Son sees data, AI as key to future advances
Then I started following many more entrepreneurs. Their personality started to appeal to me. They were problem-solving oriented,
simple in their approach. I wanted to think like them and not as part of a small cubicle in a big company. It didnt matter if it was a
small office and not a beehive. I think that hooked me on to entrepreneurship, he adds.
In another two years, while still in college, Shashank would set up Practo with Abhinav Lal, another NIT Surathkal alumnus. Share
Simplicity and common sense, Shashank maintains, are the cornerstones of Practo, which started as a practice management software
provider for doctors in 2008 before launching the consumer-facing doctor discovery and appointment booking platform five years
later.
The base on which we built our first product Practo Ray (the practice management software) was MATPA, i.e., marketing,
appointments, treatment, payments and analytics. We had decided that MATPA will be our core offering. That simplicity was critical,
says Shashank.
The plan is to make Practo a global company in 5-10 years: Shashank N.D.
Keeping the product simple yet useful, launching new verticals and products while quietly shelving the ones that did not work, have
made Practo the largest doctor discovery and appointment booking platform in the country and one of the few homegrown consumer
internet start-ups with a global presence.
The beginnings
It was while seeking a second opinion from doctors in the US for his fathers knee replacement surgery in early 2008 that Shashank
realized that sharing medical records with doctors was tough. He wanted to create a platform where records could be stored and
shared.
The idea is to make things digital. If you can make that happen, it improves efficiency and the quality of care, he says.
Shashank and Lal jointly started coding a practice management software. By May 2009, immediately after the final semester of
engineering, Practo had closed its first saleto a doctor in Bengaluru. Both had decided not to take up the jobs they were offered in
campus recruitments.
A doctor checking her appointment list on Practo Ray. Photo: Hemant Mishra/Mint
The tough part was to convince people to join a start-up. The future stars of Indias consumer internet storyFlipkart, Myntra and
Snapdealwere still fledgling businesses and multi-hundred million-dollar funding rounds were unheard of. Unicorns such as Ola,
ShopClues and Hike were not yet born. Freshdesk, the standard bearer of homegrown enterprise start-ups, would be born only a year
later.
Shashank and Lal, however, managed to sell their dream to five others. Siddharth Aggarwal today is vice-president (sales); Siddhartha
Nihalani is vice-president (engineering); Manoj Kumar is assistant vice-president (sales); Praveen Sakrii is a senior engineering
manager; and Aditya Bhat is general manager (sales and strategic accounts).
Forget being someone people would look up to. It was the opposite. People thought we could not get jobs. Thats why we did this. We
had to speak
Mayawatis to their
resignation fromparents to convince
Rajya Sabha accepted them to allow their kids to joinSoftBank
our company. We Son
CEO Masayoshi made
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Abhinav (Lal) had pooled in about Rs10 lakh from family, reminisces Shashank.
Practo, which commands a valuation of $600-650 million, has certainly come a long way. It is the most well-funded homegrown
healthcare start-up, having raised $179 million from the likes of Sequoia Capital, Matrix Partners, Chinas Tencent, Google Capital
(now called CapitalG), Altimeter Capital, Belgiums Sofina, ru-Net, RSI Fund-owned by Japans Recruit Holdings, Thrive Capital and
Yuri Milner, the Russian billionaire and founder of investment firm DST Global.
Share
Practo is the most well-funded home-grown healthcare start-up, having
raised $179 million from the likes of Sequoia Capital, CapitalG and Yuri
Milner, the Russian billionaire and founder of DST Global
The company employs about 1,500 people and claims to aggregate 200,000 healthcare professionals, 10,000 hospitals, 8,000
diagnostic centres, and 4,000 wellness and fitness centres in India, Brazil, the Philippines, Malaysia, Indonesia and Singapore.
Unlike many cash-guzzling start-ups, Practo took almost two years to raise any venture capital. Shashank says the team then focused
on strengthening the product and selling as much as possible. Feedback from doctors was all-important.
One such feedback, Shashank recalls, prompted the team to build an SMS reminder feature for patients, to make sure they turn up at
the doctors chamber on time, a move he claims has improved patient turnout and brought doctors more business.
By the time the first round of funds came in from Sequoia Capitalabout $4 million in May 2011Practo had acquired a few
hundred customers and clocked a couple of lakhs in annual revenue. The company had operations in Bengaluru, Mumbai and
Chennai.
Sequoia reached out in September 2010. Shailendra Singh (managing director at Sequoia Capital) had reached out. One of our
advisers spoke to him at a networking event. What was very impressive to Shailendra was the amount of organic traction we had
received. Today, a lot of our value is in the vision and the platform that we have built but back then it was the hard work of two years,
says Shashank.
Back then, online healthcare was unheard of in India. According to the Internet and Mobile Association of India, the country had a
measly 71 million internet users in 2009, which jumped to about 462 million in June 2016.
Unlike many cash-guzzling start-ups, Practo took almost two years to raise any venture
capital.
Between 2000 and 2008, 58 companies emerged in the practice management and hospital information management space. Of them,
only threeAxSys, Yos Technologies and Insta Health Solutions, which was later acquired by Practoraised funds from venture
capital firms, according to Tracxn, a start-up tracker.
Between 2000 and 2008, there was an explosion of private healthcare across the country. We thought that in terms of physical
infrastructure, an explosion happened and digital healthcare had to follow. That is when we invested in Insta Health Solutions. The
hypothesis was all these clinics, dental chains, laboratories, hospitals, etc. will all need solid information technology systems, medical
record systems, etc. But the uptake was extremely slow till about 2013. That is because institutions took an enormous amount of time
to adapt to technology. But in 2013-14, things started turning around. There was a huge uptick in hospitals and doctors started
opening up to technology. Consumers started seeking medical information on the internet. Consumers and doctors started having
mobile phones
Mayawatis andfrom
resignation internet accessibility
Rajya Sabha accepted improved, says Rutvik Doshi, SoftBank
directorCEO
atMasayoshi
InventusSon
(India) Advisors.
sees data, AI as key to future advances
According to Tracxn, six of the 10 most well-funded healthcare start-ups globallyJawbone, Privia Health, Proteus Digital Health and
MedSolutions in the US, and Babytree and Neusoft Medical System in Chinawere set up before Practo took off. Together, these six
companies have raised $3.18 billion from investors. The top 10 digital healthcare start-ups globally, which also include Oscar and
Flatiron Health in the US, and Ping An Good Doctor and We Doctor Group in China, along with the six other companies already
mentioned, have together raised $5.24 billion till date, data from Tracxn shows. Share
Diversification
In March 2013, Practo launched a consumer-facing doctor discovery and appointment booking platform, Practo.com, a move that
Shashank calls a watershed moment for the company.
If you look at our vision, it was always about how can we get health records on an app. So, we always wanted to be consumer focused.
We happened to do B2B (business-to-business) to support the consumer end, especially since we were bootstrapped. Launching a
bootstrapped business-to-consumer operation was unthinkable. Once you have funding, you have some leeway, says Shashank.
Industry experts say the results of Practos attempts might take some time
to show, given that digital healthcare in India is still nascent, unlike online
retail or ride hailing
Industry experts say a consumer-facing business and its huge uptakePracto claims about 50 million appointments were booked and
seven million medical records were shared between March 2016 and March 2017has led to the surge in valuation despite fledgling
revenue from the B2B business.
The appointments booked and healthcare professionals listed do not necessarily translate into higher revenue. Practo neither charges
doctors for listing nor consumers for booking an appointment on the platform.
According to documents available with the Registrar of Companies, Practo Technologies Pvt. Ltd clocked revenue of Rs165.14 crore
for the year ended 31 March 2016, as against Rs29.73 crore a year earlier. Net sales stood at Rs156 crore. Loss climbed to Rs64.61
crore from Rs12.85 crore a year earlier.
However, about Rs133 crore of sales came from Practo Pte, the Singapore-based company that holds about a 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 a year earlier.
The company is not getting valued based on a pure software as a service model. Certain sectors get higher valuation because the
stickiness is higher. Over a lifetime, you can make a lot more money from consumers and your cost of customer acquisition keeps
reducing. That was the hook. But the real deal is, if you build this over 10-15 years, you have a treasure trove of information, which has
huge potential. The way Practo can leverage the data in ancillary verticals, and this is very critical and valuable data, is enormous,
says Vinod Murali, deputy chief executive officer at InnoVen Capital India, a venture debt firm, which is also an investor in Practo.
Practo Technologies Pvt. Ltd clocked revenue of Rs165.14 crore for the year
ended 31 March 2016, as against Rs29.73 crore a year earlier. Loss climbed
to Rs64.61 crore from Rs12.85 crore a year earlier
Is the opportunity massive? Yes. Will it show today? Not necessarily. But are the building blocks being put in place methodically?
Yes, he adds.
Practo earns revenue from Practo Ray, a tablet for medical practitioners, and Practo Reach, a paid marketing solution for enterprises.
The company now plans to partner with insurance firms, medical device makers and pharmaceutical companies.
One of the new aspects we want to incorporate this year is payers, i.e. insurance companies, the government and corporates, people
who essentially pay for medical expenses. Insurance has been the most significant movement we have made so far. We have been
evaluating options with pharma companies and medical devices firms. These are in the longer term but that is where we tend to move
towards, says Shashank.
Practo has been aggressively acquiring complementary businesses to tap various healthcare providers as well as to boost revenue.
Share
Practo earns revenue from Practo Ray, a tablet for medical practitioners, and Practo Reach, a
paid marketing solution for enterprises.
In December, it acquired Enlightiks Business Solutions Pvt. Ltd, a healthcare analytics solutions firm that owns a predictive clinical
and computational platform called Querent, and uses Big Data analytics to provide business intelligence to healthcare providers. It
claims to have about 250 hospitals and clinics as clients.
In 2015, Practo acquired Insta Health Solutionsa hospital information management service providerand Qikwell Technologies
Pvt. Ltd, which had expertise in appointment scheduling at hospitalsto enter the enterprise segment. The acquisition of Insta
brought about 500 hospitals under Practos fold and Qikwell about 250 more.
This apart, Practo has expanded its offerings with the launch of clinics, diagnostics, health and wellness, online doctor consultation,
and medicine delivery, a move that experts say will help the company keep its consumers glued. It also intends to enter the health
insurance segment soon.
Doctor consultation and medicine delivery have also helped Practo metamorphose into a transactional platform.
For us, going forward, the marketing business will be big, then software and
then transactions. All our products are focused on the provider to help them
deliver a great experience to the patient
- Shashank N.D.
Practo raised $30 million in a Series B round in February 2015 from Sequoia Capital and Matrix Partners India. The big bucks came
in six months later when it mopped up $90 million from Chinas Tencent Holdings, Belgian venture capital firm Sofina, Sequoia
Capital Global Equities, Google Capital (now called CapitalG), Altimeter Capital and Milner, among others.
In January 2016, it raised $55 million at a valuation of $600-650 against $500 million during its previous fundraise, amid an overall
slowdown in funding.
Practo and the rest
While industry experts concede Practos overall dominance, each of its consumer-facing verticals has a number of competitors.
You need a big brand like Practo to push its way through in a category like healthcare, which is not yet evolved and extremely
difficult. What a company of Practos stature does is it shapes the industry and changes the industry. That phenomenon has
happened. Practos presence, and the brand, has definitely shaped the industry and hastened technology adoption, says Doshi of
Inventus.
Share
The doctor discovery and appointment booking segment has seen the emergence of at least 211 start-ups since 2014. As much as $130
million was poured into this segment in the last three years, with Practo receiving the bulk of it. Similarly, 155 start-ups were founded
in the medicine delivery segment since 2014, attracting an investment of $91 million. Netmeds leads the pack here, with a $50-million
investment. The fledgling health and wellness segment has been pursued by 145 start-ups since 2014, attracting a meagre $25 million,
led by former Flipkart executives Mukesh Bansal and Ankit Nagoris CureFit, which raised $15 million in July last year.
Practo is yet to dabble in home healthcare, which has Accel Partners-backed Portea Medical and Eight Roads Ventures-backed
Medwell Ventures in the lead.
For Shashank, though, the priority is clear.
Core for us is very clear. Help consumers find a doctor and book an appointment. Similarly, for providers, we want to become a
trusted partner when they want an IT solution. Be it Enlightiks for analytics, Insta for hospital information management, Qikwell for
appointment booking and (Practo) Ray for practice management, that is our core focus and everything else is an experiment. But, we
need to do these experiments, says Shashank.
And he is not apologetic about shelving some of these experiments, a case in point being the health and wellness category that Practo
launched after acquiring health and fitness solutions firm Fitho Wellness Services Pvt. Ltd in April 2015.
Practo has expanded its offerings with the launch of clinics, diagnostics,
health and wellness, online doctor consultation, and medicine delivery, a
move that experts say will help the company keep its consumers
Share
The company even pruned its workforce by about 10%. About 150 employees were asked to leave in April due to redundancies
occurring due to acquisitions and performance required for growth, said a company spokesperson.
We try many things. Some click and some dont. Wellness and fitness is something which we tried but we need more focus and
management bandwidth. It is more on the pause mode. But, medicine delivery is an interesting business because there is a lot of pull
from the market, says Shashank.
Industry experts say the results of Practos attempts might take some time to show, given that digital healthcare in India is still
nascent, unlike online retail or ride hailing. Besides, doctor discovery or health consultation, is unlikely to be part of a consumers
daily schedule.
For this to be understood, you need investors who look beyond the five-year horizon. This is not a three- to five-year game plan. The
dividend would be significant if you crack this and get reliable patient data, have significant market share in terms of doctors and you
are the go-to platform for anything medical, says InnoVens Murali.
Practo head offices in Bengaluru.
It may not happen in two-three years, but in 10-15 years, definitely, if they have the capital. Practo will be a special company. But,
yes, it also needs patient capital and investors who think long term, he adds.
There is reason to be hopeful. According to a report by CBInsights and KPMG, investment in healthcare technology start-ups globally
has not taken a hit despite a slowdown in funding. About $3.2 billion each was invested in the sector globally in 2016 and 2015, as
against $2.2 billion in 2014 and $1.5 billion in 2013.
Shashank admits to the challenges ahead, but maintains that Practo is at the top of its game.
We have our sets of challenges. For example, technology adoption by providers. We face challenges in giving it to them and retaining
them. Those challenges are largely around how do we make sure the healthcare ecosystem absorbs such innovation and bring in the
behaviour change. Providers are very comfortable in doing things a certain way and to break that inertia is hard. It is a combination of
our ability to build a great product and have a great distribution network. When an industry adopts digitization, it will have its
challenges. We are ready for it, he says.
First Published: Tue, May 16 2017. 04 24 AM IST
TOPICS: PRACTO SHASHANK ND ABHINAV LAL PRACTO RAY PRACTO FUNDING
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7/20/2017 Can Practo take the next big leap forward?

Can Practo take the next big leap forward?

Mayawatis resignation from Rajya Sabha accepted

Practo and the rest

For Shashank, though, the priority is clear.

Practo head offices in Bengaluru.

First Published: Tue, May 16 2017. 04 24 AM IST

TOPICS: PRACTO SHASHANK ND ABHINAV LAL PRACTO RAY PRACTO FUNDING

Mayawatis resignation from Rajya Sabha accepted EDITOR'S PICKS

How much do India Inc.s top executives earn?

Tata group said to have sought details of Air India disinvestment

Bringing Puducherry beach back from the dead

You May Like Sponsored Links by Taboola

Best Credit Cards Offers You Would Not Want to Miss

Become Digital Marketing Certi ed in 2017 from IIM

Leftover iPhone stocks worth $619 selling for under $40!

Doing International Business? Get Better Rates On Payments

Home Consumer Education

Companies Lounge Sports

Industry Money Technology

Politics Science Mint on Sunday

Contact Us Mint Apps

Privacy Policy Terms of Use Mint Code RSS

Copyright 2017 HT Media Ltd. All Rights Reserved

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