“Tencent is truly an inspiration for any platform company coming up,” he tells Tech in Asia in a candid conversation. “Their WeChat platform has changed the way the country works.”
Tencent is truly an inspiration for any platform company coming up. Their WeChat platform has changed the way the country works.
It’s refreshing to hear acknowledgement of Chinese innovation, given its usual characterization as copying the West. Shashank goes on to explain how Practo is inspired by it.
“The ability of a platform to be multi-purposeful is very important, as WeChat has done by bringing communication, banking, commerce, and other things to its platform. Similarly, Practo wants to take care of all your health requirements.”
WeChat’s parent company Tencent is the largest investor in Practo, having led both its series C round of US$90 million in 2015 and its series D round of US$55 million earlier this year. That helps Practo’s drive to be a WeChat for healthcare, while at the same time helping the Chinese company get a deeper understanding on how its model works in markets outside China.
Practo started out with a SaaS (software-as-a-service) product called Ray to help doctors and clinics with appointments, billing, and records. That was eight years ago, and selling such a product meant going out on the street. It led to launching the Practo portal to connect consumers with doctors.
Backing from Sequoia helped it to scale up and expand across the country before going global. Today it has a presence in 15 countries, including Singapore, Indonesia, and the Philippines in Southeast Asia, Saudi Arabia and the UAE in the Middle East, and Brazil in South America.
It was a couple of years ago that Practo began to pursue the idea of a one-stop shop. That was when Tencent came on board after leading a US$90 million series C funding, one of the biggest rounds for a healthcare startup anywhere in the world, and not just in India.
A series of acquisitions followed to rapidly expand Practo’s portfolio of products. It acquired Genii for software product development, Insta Health to deploy hospital information management systems, Qikwell for scheduling appointments, and Enlightiks for analytics. These expanded its suite of enterprise software, which began with Ray. At the same time, it added diagnostic labs and wellness centers as well as home delivery of medicines from drugstores on the consumer-facing side of its business.
Other add-ons for consumers included online chat with medical practitioners, keeping health records online for easy access and sharing with doctors, and health articles by doctors.
Now Shashank wants to take the next step to bring other related stakeholders on to the platform – and this where it starts resembling a WeChat for healthcare. For example, it can be a marketplace for health insurance, giving additional value to both consumers and healthcare providers.
It’s much harder than it sounds to build such a multi-dimensional platform. “The healthcare ecosystem is complex, and it gets more complex as we get more stakeholders connected, even though we derive more value for everyone,” explains Shashank. “Different stakeholders operate in different ways. Insurance, hospitals, clinics, pharmacies – each industry has its own intricacy.”
The Indian startup ecosystem has a number of open-ended questions right now about consumer internet businesses.
In other words, first Practo has to resolve industry-specific issues and then figure out making them work together. Even a seemingly simple thing like booking an appointment with a doctor can get complicated, because many areas of specialization are not clearly defined. This can involve seeking clarifications from hospitals or regulators to make it easy for consumers to get what they need. And that’s just one small example of the complications that arise when multiple healthcare players are brought to one field.
Shashank was talking to me in the context of a rebranding of Practo announced today. Its new identity and positioning tries to reflect the expansion of the health portal into a platform where entities like insurance providers, medical device makers, pharmaceutical companies, and others can participate along with patients, doctors, clinics, hospitals, diagnostic labs, and wellness centers.
The Practo logo, which earlier had three dots before the name, now has two dots, one on either side of the name. This is supposed to indicate that Practo can connect any two stakeholders in the healthcare ecosystem – a hospital and a patient, an insurer and a patient, an insurer with a healthcare provider, and so on. The tag line has also changed from “your health app” to “your home for health,” to evoke a feeling of trust and a suggestion of everything being under one roof. The design is by New York-based CGH which has worked with global brands like National Geographic, Armani, Sony, and Oculus.
Money, money, money
What hasn’t changed much from the early days of Practo is its monetization. Shashank admits that its software products for hospitals and others bring in most of the revenue. Advertising and marketing are also pitching in. “Healthcare businesses are growing fast and looking to attract more consumers. We help them in this growth,” says the Practo boss.
About one-fifth of its revenue comes from abroad, and in some markets like the Middle East it has opted to offer only the enterprise products for now to keep costs down and make the bottom line healthier. But Practo still has some way to go to turn profitable, even as it saw a doubling in the number of visitors and an 81 percent rise in appointments booked over the last year.
The consumer internet play in Practo’s home market India has come under scrutiny over the past few months. Assumptions made during the hype years of 2014 and 2015 are up for a rethink, factoring in Indian consumers’ inclination and capacity to spend online. The discount-driven growth in traction at ecommerce sites, for example, has mostly led to mounting losses and not loyal customers. SoftBank-backed Snapdeal appears on the verge of a distress sale.
It’s a time for correction and taking stock of what’s of real value. “The Indian startup ecosystem has a number of open-ended questions right now about consumer internet businesses,” says Shashank. But Practo’s gameplan has always been in tandem from the very outset – revenue coming from its business-to-business (B2C) software products, and traction coming from its business-to-consumer (B2C) portal. This has hedged its bets and made it more sustainable than some of the pure B2C players.
The WeChat-like expansion to pull more stakeholders into its platform will add a new dynamic to this interplay between B2B and B2C at Practo. It could also generate new revenue streams. If that happens, India could see the rise of a new unicorn while another one bites the dust.