Tencent, Google Capital, Yuri Milner, Sofina, Altimeter, Sequoia, and Matrix: the line-up of investors in Indian health app Practo is a veritable who’s who in the VC world. Even more impressive than the magnitude of the US$90 million series C investment it announced today, therefore, is its quality.
Not that the quantity is to be scoffed at. The US$90 million, coming just six months after a US$30 million funding round, indicates the high growth path the startup is on. With US$125 million in all, Practo is now one of the best-funded digital health startups in the world.
But what’s with the star-studded investor team? Why does Practo need such a galaxy of VCs?
Time to buckle up
The answer is blowing in the winds of change at Practo. It began in 2009 as a tool for doctors to manage their appointments and patient records: Practo Ray. Four years later, it launched a consumer-facing website and app for patients to connect with doctors. Two years after that, it broadened the scope of Practo to every facet of healthcare, connecting with pharmacists, hospitals, and diagnostic centers, as well as wellness centers for preventive health. “Your health app,” Practo dubbed itself. And now, with its product well and truly embedded and validated in the healthcare ecosystem, it’s time to strap on the seat belt and take off globally.
“We have been doing a lot of plumbing in the last few years. Now we have a very good base. We have delayed our global launch for a while to build a strong base first,” explains Practo founder and CEO Shashank ND.
Practo already has a presence in Singapore and the Philippines. About 30,000 out of the 200,000 doctors on the Practo platform are outside India. But so far, it has merely tested the waters. With the new funds in its sails, it’s launching in 10 countries in Southeast Asia, the Middle East, Eastern Europe, and Latin America – places similar to India in terms of healthcare needs.
It’s expanding in India too, of course. Although Practo is connected with the healthcare ecosystems in 35 cities, there’s still a large underserved population in second- and third-tier cities. Practo plans to triple its domestic presence in the next few months, reaching out to patients, doctors, and hospitals in 100 towns and cities across India.
It’s in managing this rocketing expansion that Practo needs all the help it can get from its marquee investors. Let’s begin with Tencent.
The big China example
Practo has no plans (as of now) to go to China, says founder and CEO Shashank ND. But it has a lot to learn from China and Tencent about hyper growth.
“India is where China was seven years ago. We are going to see the same hyper growth that China saw in the last seven years. From operational efficiency, to building companies, to managing that kind of growth on a sustained basis year-on-year for such a long time is extremely difficult. China has done that. Take any of the big Chinese startups. Look at their scale in 2000, and look at where they are in 2010. There is a huge difference. From messaging to ecommerce to taxi transport – so many examples,” Shashank tells Tech in Asia.
His advice to startups in India at the takeoff stage is to learn from Chinese companies, and not repeat the mistakes made by them. “Take the lessons learned by Chinese companies, then do it faster and better here,” says Shashank.
That’s exactly what he’s doing with Tencent, which not only has incisive knowledge of China, but has itself built a hugely scalable technology platform from messaging app WeChat. That Tencent picked Practo as its first investment in India is also a big validation for the Indian health app.
“We look for ambitious, visionary Internet companies that are improving people’s lives at a global scale. Practo is a digital healthcare leader and one of the fastest growing healthcare companies in India. 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 M&A at Tencent.
A third bet in India for Google Capital
Another important Practo backer is Google Capital, which already has two other winners from India in its portfolio: customer support software maker Freshdesk and real estate portal CommonFloor. Freshdesk CEO Girish Mathrubootham had explained to Tech in Asia in an earlier interview how Google Capital had provided key data and insights to crack global markets. Practo can expect similar support.
Physicist-turned-VC Yuri Milner, who made his billions from investments in Facebook, Twitter, and WhatsApp, is another invaluable consultant, and Shashank could barely hide his glee at having him onboard. He was going to meet Milner later in the evening in Bangalore, after the funding announcement, and Practo’s Eastern Europe expansion plans would obviously figure in the chat.
Neither Yuri Milner nor Belgian investor Sofina is a stranger to India, having invested in ecommerce leaders Flipkart and Snapdeal. But for US-based Altimeter Capital, Practo is an India-first investment. The startup ecosystem will be cheering at that.
Text: TechinAsia by Malavika Velayanikal 07-08-2015