Practo Files for IPO Amid 90% Market Dominance in India, Backed by Tencent
As living standards improve, people are paying increasing attention to their health, naturally expanding the market for the digital health industry. It is therefore no surprise that capital from various sectors continues to flow into this industry.
Most recently, Tencent Holdings has sparked considerable speculation. It is not only interested in domestic digital healthcare information platforms such as Guahao.com and DXY, but has also set its sights on India’s Practo.
Although there is no shortage of Chinese capital investing in the Indian market, with companies like Alibaba and Xiaomi making their mark, it is rare to see Chinese firms launching a medical offensive in India. Just how large is this market, and what aspect of Practo caught Tencent’s eye? VCBeat conducted an “anatomy” of Practo, revealing not a bloody mess, but clear and distinct patterns.
Ambitious Practo
Practo was founded in May 2008 by the company’s current CEO, Shashank ND, and CTO, Abhinav Lal, with its headquarters located in Bangalore.
After seven years of development,Practo has currently expanded its business to 35 cities., in addition to its flagship Indian market,It has also entered the markets of the Philippines and Singapore.Practo’s next step is to expand its business coverage to 100 cities in India and 10 cities across Southeast Asia, Latin America, the Middle East, and Eastern Europe by March next year.
The global workforce has currently reached a total of 1,500 employees.
To realize its ambitious expansion plans, Practo will undoubtedly need substantial reserves of strength—namely, its high-quality products and premium services.
5 Major Products & Services
◆Practo Ray
PractoAt its inception, the flagship product was a software called Practo Ray.Co-developed by the company’s two founders and refined over many years, this software has evolved into a comprehensive medical data management solution. Android and iOS versions of Practo Ray were launched last year and this year, respectively. The following section outlines its specific features:
Appointment Management Function:Accept and reschedule appointments anytime, anywhere; automatically send appointment confirmations and reminders to patients via SMS and email; electronically register patients upon their arrival for visits.
Bill Management Function:Generate and send electronic bills; automatically remind patients to pay their bills; accept advance and installment payments; create a catalog of treatable conditions and a treatment price list.
Electronic Medical Record (EMR) Management Function:Create electronic medical records (EMRs) for patients; convert patients' existing paper-based medical records into electronic format and integrate them into the newly created EMRs; facilitate the management of various complex documents, such as X-ray images; automatically send electronic prescriptions to patients via SMS and email; provide robust security measures to ensure the safety of user data.
Information Alert Function:Remind staff to return patients' missed calls; remind patients of their scheduled clinic arrival times; automatically send greetings to designated patients on special occasions, such as birthdays.
These features demonstrate that Practo not only facilitates paperless operations but also enhances physicians’ administrative efficiency, enabling them to excel in management tasks and devote more energy to patient care.
Practo Ray, as a multifunctional service software, is also very affordable.The Practo Ray Basic plan is priced at 999 Indian rupees per month (approximately 100 Chinese yuan), while the Professional plan, which offers more customization features, is priced at 1,999 Indian rupees per month (approximately 200 Chinese yuan).. The latest data shows that the number of Practo Ray users has exceeded 180,000. (The author quickly calculates that this is clearly a revenue-generating trend.)
◆Practo Tab
Practo also launched aPracto Tab: The Tablet Designed for Use with Practo Ray. Priced at 23,000 rupees (RMB 2,284), this tablet offers additional features beyond its integration with Practo Ray:
First, patients can use Practo Tab for self-registration, simplifying the registration process;
Secondly, Practo Tab can collect patient feedback and upload it to Practo’s official website, Practo.com;
Furthermore, Practo Tab can serve as a multimedia device to help patients better understand their medical conditions;
Finally, after a one-time synchronization setup, Practo Tab will automatically download data stored on Practo Ray in the cloud, and any new data added to Practo Tab will also be automatically synchronized to the cloud. Once synchronization is complete, users can leverage Practo Tab to offline modify and manage all downloaded data.
◆Practo Reach
Another paid service offered by Practo to doctors is Practo Reach. This service is essentially similar to Baidu’s SEM, except that it targets individual doctors.For example, after a doctor subscribes to the Practo Reach service, their information will appear in designated positions on the search results page when patients use Practo’s search engine to find relevant physicians.However, purchasing the Practo Reach service does not affect the ranking order of search results. Service information will only appear in designated locations, and the information box will be labeled with the word “sponsored.”
As shown in the figure above, information from service purchasers is labeled with the word “Sponsored” and appears at the top of the search results list.
◆Practo Profile
In addition to the three fee-based service products mentioned above, PractoPracto Profile, a free service for doctors, has also been launched.。
Doctors can use this service to provide Practo with information about their practice, such as practice location, the date they obtained their medical license, and years of experience. Practo’s professional team verifies this information. Once verified, doctors become searchable by patients on Practo’s search engine. Clearly, this service helps doctors reach a larger patient base. Data shows that there are currently 200,000 Practo-verified doctors in India.
◆Practo.com
Unlike Practo’s physician-oriented services and products, most of which are paid, its patient-facing services and products are entirely free. In 2011, Practo launched its own physician search website, Practo.com, marking the commencement of its patient services.Currently, the primary service Practo offers to patients is leveraging its own search engine, Practo.com, to help them search for and book appointments with doctors.. To enable patients to quickly find doctors suited to their needs, Practo focused on three key areas when building its search engine: physician resources, algorithms, and user experience.
I:In terms of physician resources, Practo aims to encourage as many doctors as possible to provide their professional information on the platform while ensuring that the information submitted by each doctor is authentic and valid, it specifically hired two professional teams to separately complete the aforementioned two tasks. One team is responsible for canvassing neighborhoods to identify physicians and, upon locating them, inviting them to submit their information to Practo (physicians who are not invited may also voluntarily submit their information through the Practo Profile service). The other team is responsible for conducting on-site verification and credentialing of each physician.
II:In terms of algorithms, Practo employs its proprietary relevance algorithm, whereby the order of search results is determined solely by their match with the search query, without offering paid ranking services. To ensure that highly skilled physicians appear at the top of the search results,Practo has incorporated patient feedback into its algorithm., i.e., certified patients can rate physicians’ medical services. Physicians with higher overall ratings receive additional points in the system’s ranking algorithm, helping these high-quality doctors appear at the top of search results.
III:In terms of user experiencePracto’s search page features a minimalist design, and its results are displayed in a clear, well-organized layout, making the entire search and appointment-booking process highly convenient.
Next, we will use images to provide an intuitive overview of the entire search and appointment process.
Step 1: Go to the homepage of Practo.com. You can see that the search bar in the middle is divided into three parts, which are the city selection field, keyword input field, and search button from left to right. If you don't want to search through the search bar, you can also directly click on the circular icons below the search bar. Each icon represents a different type of doctor, such as dentists, general practitioners, etc.
Step 2: Select the city where you wish to seek medical care in the city selection bar (Bangalore is selected in the figure), then enter a keyword (e.g., “dentist” as shown in the figure) in the search bar, and press Enter or click the search button.
Step 3: On the search results page, basic information about qualified physicians—such as their photos, years of practice, and number of recommendations—is displayed on the right. On the left are filters that allow you to narrow your search by appointment availability, consultation costs, and the physician’s location for more precise results.
Step 4: Select a doctor to schedule an appointment. If the selected doctor has enabled the paid Practo Instant service, a “Book Appointment” button will appear in the lower-right corner of the doctor’s profile section (as shown for the first doctor in the figure). Clicking this button directly allows you to schedule the appointment. If the selected doctor has not enabled Practo Instant, the “Book Appointment” button will not appear in the doctor’s profile section (as shown for the second doctor in the figure), and patients must schedule the appointment by calling the phone number provided in the profile. Now, select the first doctor to proceed with the following steps.
Step 5: Select an appointment time. The grayed-out slots in the image indicate times that have already been booked, while the green slots are available. Choose one to proceed to the next step.
Step 6: Confirm appointment information. Enter your personal information in the right panel of the figure, and click the "Done" button at the bottom to complete the appointment.
It is precisely due to Practo’s strong emphasis on physician resources, algorithms, and user experience that its physician search engine, Practo.com, garnered widespread acclaim upon launch. As of March this year, monthly searches on Practo.com have exceeded 10 million.
Although Practo boasts excellent products and high-quality services, it has yet to achieve profitability. In the face of sustained losses, the only avenue available for Practo to pursue its expansion plans is through financing. The following section examines Practo’s financing history.
This Year’s Financing Has Exceeded 100 Million Yuan
Practo has completed two rounds of financing this year (2015). The most recent Series C round, led by Tencent, raised $90 million, with participation from Google Capital, Sequoia Capital, and Matrix Partners India. In February of this year, Practo secured $30 million in its Series B round from Sequoia Capital and Matrix Partners. Since its initial funding round in 2011, Practo’s total capital raised has reached $124 million.
What has attracted investors is not only Practo’s products but also the ambition of its CEO, Shashank ND. Moreover,He is only 27 years old.。
27-Year-Old CEO
Shashank ND graduated from a prestigious Indian institution, the National Institute of Technology, with a Bachelor of Engineering degree. As CEO, he is primarily responsible for charting Practo’s strategic direction. Although the plans he has formulated may appear somewhat unfocused at first glance, this is not actually the case.Shashank ND has a clear understanding of the company's needs, a point that is particularly evident in corporate acquisitions. For instance, to enrich its product portfolio, Shashank ND chose to acquire Fitho, one of the earliest-established digital health companies in India.
Shashank ND’s resolve to found Practo dates back to 2008. That year, doctors recommended knee replacement surgery for Shashank ND’s father. Seeking a second opinion, Shashank ND wanted to consult with physicians in the United States. However, this plan fell through because his father lacked electronic medical records, and mailing the paper records would have taken too long. As a result, the U.S. doctors were unable to review the medical history and provide their advice. Following this experience, Shashank ND realized thatThere is a Market Gap in the Digital Management of Medical Information in India, so he teamed up with his college classmate Abhinav Lal to co-found Practo.
With Practo’s rapid growth in recent years, Shashank ND was named to Forbes’ 2015 list of “30 Under 30” entrepreneurs to watch.
Based on the above information (with key points bolded), Practo primarily serves two groups: physicians and consumers (including patients). A major difference between their corresponding services is that those aimed at physicians are almost entirely fee-based, whereas those for consumers are free of charge. This is particularly true for Practo.com’s physician appointment service.
As is well known, the major active players in China’s online appointment registration market include Guahao.com, Yihuwang, and later entrants such as Baidu Doctor. However, from a user experience perspective, these platforms either charge fees ranging from tens to over one hundred yuan or lack granular segmentation in their search functionalities.
Furthermore, another major difference isPracto essentially integrates an appointment scheduling platform with Baidu’s SEM products.. (There is no need to reiterate here how much of Baidu’s revenue comes from medical SEM; everyone understands.)
Furthermore, according to data provided by Shashank ND, Practo’s monthly growth rate currently ranges from 20% to 30%, and its market share in India has reached 90%. If these figures are accurate, profitability is likely just a matter of time in the coming years.
By Zi Junwei | Edited by Mo Renying