Practo aims profitability next fiscal - plans for IPO soon
The company connects around 15 crore people annually with doctors in India with 6-7 top cities accounting for more than 50 per cent of the business.
Tencent-backed healthcare and diagnostics app Practo is aiming to turn profitable in the next fiscal and is looking at a stock exchange listing with an initial public offering (IPO) soon, its co-founder and CEO Shashank ND said. Practo is looking to enhance its presence in smaller cities and towns and leverage AI to analyse data and provide much better analysis and outcomes in healthcare.
In an interview with PTI, Shashank said the startup is already cash flow positive. "This year we will grow by a good healthy margin... Our EBITDA would have improved dramatically from last year. We will be near break-even this year and next year is when we really will be able to show significant profits." Founded in 2008, Practo connects doctors with patients and offers several ancillary services such as telemedicine.
Income from diagnostic and consulting services formed 50 per cent of the total operating revenue. In the 2022-23 fiscal (April 2022 to March 2023), the Bengaluru-headquartered firm halved its losses to Rs 93.68 crore. Revenues grew 3 per cent year-on-year to Rs 194.53 crore and Earnings before interest, taxes, depreciation, and amortization (EBITDA) improved 39 per cent.
Income from diagnostic and consulting services formed 50 per cent of total operating revenue with the rest coming from subscription services, sale of software and maintenance offered to doctors and clinics. He said the company is looking at full-year profitability next fiscal, as it looks for sustainable growth, while delivering exceptional service through a full-stack model.
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Backed by China's Tencent and venture capital funds Peak XV Partners and Matrix Partners, it is also planning an offline presence in primary and secondary healthcare through Practo-branded clinics."I think that's something that we have cracked and now it's for us to continue to grow at a rapid pace," he said. Also on radar is a listing. "Yes, we would like to go public. I can't give timelines but yes soon," he added. "I do see the company going public soon, but I don't think there's any particular timeline for it. Two years, three years from now, we need to see." Terming the domestic market as a priority for the company, he stated that Practo would go "deeper into different geographies" over the next few years.
The company connects around 15 crore people annually with doctors in India with 6-7 top cities accounting for more than 50 per cent of the business. Having established itself in the big cities, the focus is now to expand operations in Tier and Tier 3 cities and towns, Shashank stated. "We've made a lot of good progress and we've been number one with very large market share. Now we believe that the next phase is to create a more omni-channel approach where online and offline, you know, kind of go hand in hand," he noted.
The advent of AI has really opened new possibilities in the healthcare segment to analyse a lot of data and to provide much better analysis, he said. "Even a 2 per cent improvement in quality means a life saved in healthcare. So, these are a couple of areas that you know, broadly we are really focusing on going forward," Shashank ND stated. He noted that the company is well capitalised and there were no immediate plans to raise funds. Practo, which has so far raised around USD 230 million in multiple funding rounds, is present in over countries, helping over 30 crore patients by connecting them with around 1.5 lakh verified doctor partners.
Shashank said that the company would like to focus on strengthening its existing businesses while staying away from other verticals like diagnostics. "If you look at the private providers (segment) it is about USD 100 billion space in India. It's a very very large space. No doubt diagnostics and others have very good margins.. But I think the provider side itself is a very large space... So I think we're very comfortable staying on the provider side," he noted.
(With Inputs from PTI)