• News
  • Columns
  • Interviews
  • BW Communities
  • Events
  • BW TV
  • Subscribe to Print
BW Businessworld

The Rise Of Practo Technologies

Over the last three years, the startup has created a database of 200,000 registered doctors, 5,000 diagnostic centres and 10,000 hospitals in 50 cities

Photo Credit : Bivash Banerjee

The healthcare industry has been dominated by technology providers like Dell, Philips, Siemens and GE. As important as their systems and machines were in capturing ailments and creating healthcare records, patient information was not meticulously maintained. Data was still being captured on paper and data would be dumped in an electronic database, which would be cleaned every six months. So there was no real time information available on previously treated patients. This was a business opportunity waiting to be taken up and several Indian startups have jumped into this. But one startup has become one of the most valued healthcare startups in the country.

Over the last three years, Practo Technologies has made in-roads into the Indian market by creating a database of 200,000 registered doctors, 5,000 diagnostic centres and 10,000 hospitals across 50 cities (will expand to 100 cities). It is now expanding across South East Asia, Latin America and the Middle East. Its business model is to sell its end-to-end cloud based services, which enable doctors to market, consult, manage and schedule appointments with their patients, on an annual basis.

In its seven-year journey, Practo has raised $124 million, most of it over the last two years, and is using the money raised to make health records easier to access, for a doctor, and for patients it is making doctor discoverability available on the mobile app. With the likes of Yuri Milner, Google Capital and Sequoia Capital backing the company the company plans to expand its business in selling hospital information management services, which is dominated by big companies.

There have been several attempts in the past to organise records in the chaotic data universe of the health industry. The problem is that the data link between general practitioners, hospitals, insurance companies and pharma companies remain in different dimensions, each has its own data universe, which connected by disparate IT systems that only record volumes of care provided rather than the impact of care. Can Practo make a change here? "We will create a reliable data source of clinics and doctors first. That is the first loop and then we hope to connect with a lot more hospitals and other allied services in the health industry," says Shashank N.D., founder and CEO of Practo. He adds that the smartphone will help bring healthcare faster to smaller cities. Practo is the only company in the world that offers a doctor search, software-as-a-service and a Hospital Information Management System. It has made four acquisitions- InstaHealth, Qikwell Technologies, Genii Technologies and Fitho, all of which have strengthened its portfolio of doctor services.

The strategy is the hyperloop, which Shashank says the company discovered in 2009, to complete the patient and hospital connection. It involves marrying technology, the patient app, the SaaS product for doctors, the market place and the hospital information management system in one system. "It is a powerful idea," says Shashank. He adds that even in the USA these are called market networks and no one has ever attempted such a complete suite of a product.

A great dream, but this endeavour of Practo is not going to be easy because doctors use technology for transactions and not linked to preventive care. Another conundrum is that large Indian hospitals like Narayana Hrudayalaya and Manipal Hospitals work with large service providers like HCL Infosystems and Wipro to integrate all the new technologies into their legacy management systems. Also the entire health ecosystem lacks transparency when it comes to insurance payouts and treatment. The first task of Practo will be to qualify as a vendor with large technology service providers or systems integrators like Infosys, Wipro and HCL or possibly go out on their own to work with hospitals. "Any startup will have to go through this rigorous process of qualifying as a vendor or will have to work with smaller hospitals to build long term credibility," says Sanchit Vir Gogia, founder of Greyhound Research, a consulting firm. There is merit in this argument because healthcare is one of the largest spend in any country.

The Opportunity And Challenge
According to the Indian Brand Equity Foundation (IBEF), the opportunity for healthcare technology is huge and is expected to register a compound annual growth rate (CAGR) of 22.9 per cent during 2015-20 to $280 billion. Rising income level, greater health awareness, increased precedence of lifestyle diseases and improved access to insurance would be the key contributors to growth. The private sector has emerged as a vibrant force in India's healthcare industry, lending it both national and international repute. It accounts for almost 74 per cent of the country's total healthcare expenditure. Telemedicine is a fast-emerging trend in India; major hospitals (Apollo, AIIMS, Narayana Hrudayalaya) have adopted telemedicine services and entered into a number of public-private partnerships (PPP). The telemedicine market in India is valued at $7.5 million currently and is expected to grow at a CAGR of 20 per cent to reach $18.7 million by 2017. Further, presence of world-class hospitals and skilled medical professionals has strengthened India's position as a preferred destination for medical tourism.

There are around 75,000 primary health centres in India and over 500,000 clinics in India. According to a PriceWaterHouse report, 100,000 hospital beds have been added annually, in India, and yet the industry will fall short of the 1.6 million beds needed annually by 2034. The report also adds that a ratio of doctors per 1,000 people is just 0.6, in Brazil and China it is 1.8. India has only 1.3 hospital beds per 1,000 people, making it significantly lower than the guideline of 3.5 beds defined by the World Health Organisation. The report adds that the Indian healthcare delivery system, which suffers from acute problem of limited resources, will need an investment of around $245 billion through traditional means to deliver desired outcome in next two decades.

There are several healthcare startups that are trying what Practo wants to do. DoctorC, a technology company from Hyderabad, is connecting diagnostic centres on one platform and is currently raising money to ramp up operations beyond three cities. There is MediAngels, a platform that connects with doctors to provide second opinions for patients. Similar to Practo's search platform is Sugerica, which allows comparing treatment, across hospitals, for an ailment. Not every business is easy, sometimes ideas crop in too early. There was DocTree, a patient bidding platform - where hospitals would bid on behalf of their surgeons to win patients in need of surgery after being diagnosed with an ailment. This idea fizzled out because of the lack of finance to keep the operations running and its inability to integrate referrals from general practitioners. Practo is yet to make profits like several of these startups. However, it has won the game of raising money. None of the healthcare startups have raised large sums of money. Fitness management company GoQii has raised $13.4 million and physiotherapy and geriatric care company Portea has raised $48 million, the rest have raised less than $1.5 million. Now that funding is drying up it is not going to be easy for several startups to scale up in the health industry. Practo will continue to expand across markets and will add more people to its 1500 member team, which will increase the costs. However there are more than 50,000 paying doctors for Practo's services. "Their product has automated my appointments, the payments, the management of patients and in house doctors," says Dr Ranjani Rao, a dentist and founder of V2E City Dental Centre.

Similarly Dr Sangeetha Honur, another doctor, says that Practo was different because it offered a paperless collection of records. "In the USA most of the networks are linked to insurance payments and claims, here Practo helps collect information on patients," says Honur.

Practo can still become one of the large healthcare software providers as a Frost and Sullivan report puts the market opportunity to be Rs 9,000 crore in size by 2018. It has achieved a high valuation of at least $500 million. But it needs to be accepted by Indian hospitals which spend less than .60 percent of the revenues on upgrading their IT infrastructure. At least for now Practo is on its way to becoming the most valued healthcare startup from India.

Tags assigned to this article:
healthcare startups Practo