Rs 573 crore investment round lead by Tencent, Sofina values online healthcare service Practo at Rs 3,300 crore

BENGALURU | MUMBAI: Chinese online giant Tencent has made its debut in India by leading a Rs 573-crore ($90-million) investment round in Practo, an Internet-based service to schedule appointments with doctors. Belgium’s Sofina and US-based investment firm Altimeter Capital joined in as new investors. The deal, which sources said values Practo at $525 million (Rs 3,348 crore), has also seen participation from existing investors Sequoia Capital, Matrix Partners as well as Sequoia Capital Global Equities, Google Capital and Russian billionaire and DST Global founder Yuri Milner. The physicist-turned-investor has backed the seven-year-old company with around $5 million, making this one of his biggest personal investments. “This is the largest fundraise by a health tech company in the world,” said Shashank ND, 27-year-old CEO of Practo, which has so far raised a total $125 million. “Seven years ago, we started with the crazy idea of having a health account for all. Now, we’re inching close to that.”

Tencent is the second major Chinese company to back an Indian startup after consumer Internet group Alibaba bought a stake in Paytm. Taiwan’s Foxconn has invested in Snapdeal along with Japan’s SoftBank. Tencent’s investment comes almost a year after it invested $70 million in DXY (also known as Ting Ting Group), China’s largest online healthcare service community. Practo said it will not be entering China for now and will only leverage Tencent for its experience of running large companies.


“We look forward to working with the Practo team as the company transforms healthcare in India and international markets,” said Hongwei Chen, senior director of investment and mergers & acquisitions at Tencent.

Globally, New York-based ZocDoc is one of the most heavily funded startups in the doctor-search space, having received up to $98 million from investors including Khosla Ventures and DST Global.

EXTENDING PRACTO’S LEADERSHIP

This round of funding is aimed at extending Practo’s leadership in India and establishing it as a clear winner in a space that is becoming crowded. In the past year, startups such as Lybrate, Ziffi and Qikwell have raised money and they also compete with search firms such as Just Dial.

“I expect them (Practo) to expand and innovate like mad,” said Ravi Gururaj, chairman of Nasscom Product Council, who is of the view that the company’s fundraising is a reflection of opportunity and scale that is available across India and transformation that is possible in the healthcare space. Investors have also backed the global ambition displayed by the company which now has operations in Singapore and Philippines.

“We’re thrilled to invest in Practo as they work to improve access to health information for patients and doctors in India, and expand across Asia and globally,” said David Lawee, partner at Google Capital. Such backing has helped the company register an over three-fold increase in valuation. Cofounded by Shashank and technology chief Abhinav Lal, both engineers from the National Institute of Technology, Surathkal, Practo was estimated to be worth Rs 1,000 crore in its most recent round of fundraising in February, when it mopped up $30 million (Rs 189 crore) from Sequoia Capital, Matrix Partners and venture debt provider InnoVen Capital.

“We invested a seed round in Practo when the total company could be seated around a coffee table; it is one of the few companies in India building a software platform for a very, very large industry like healthcare,” said Shailendra Singh, managing director of Sequoia Capital, who first backed the company in 2011.

EXPANDING OPERATIONS

Practo’s cofounders have moved swiftly to expand operations at the company they launched in 2008 while still on campus. They now have two software products on offer — one for consumers to search and book appointments with doctors and another used by doctors, clinics and hospitals to manage appointments and digitise records. Over 1.5 lakh doctors are listed on the service in over 35 Indian cities, with over 8,000 hospitals on its platform.

Experts are of the view that Practo will need to tread carefully as it enrols doctors on its platform. “They are ultimately commoditising the medical field; they have to be careful in not incentivising doctors to join the platform, like Uber or Ola do for drivers. That will be a breach of ethics,” said Mohandas Pai, a cofounder of Aarin Capital, an early stage fund that focusses on healthcare investments. He is also the chairman of Manipal Global Education, part of the group that runs the Manipal Hospitals chain. “Most people go to a doctor if they have faith. Doctors have empathy. We have to wait and watch how this will turn out,” he said.