Healthcare technology company Practo announced a fund raising of $30 million last week, from Sequoia Capital India and Matrix Partners, with plans to expand the business to 35 cities in India. MediaNama spoke with Practo co-founder Shashank ND on how the company, which employs 600 people, makes money, its views on adding additional revenue streams, what surprised it about its international expansion, among other things:
MediaNama: What do you intend to do with the funds you’ve raised?
Shashank ND: The most important thing for us is our expansion. We’re expanding to 35 cities using this fund-raise. So far, our reach has been limited to 6 cities in India: Bangalore, Hyderabad, Chennai, Delhi, Mumbai and Pune. We should be done with 35 cities by the end of this year. The expansion has already started: We have added 6 more cities. We expect to complete 35 cities much before the end of this year. We are also present internationally, in Philippines and Singapore. We intend to increase the presence to a few more cities in South East Asia, in the Middle East and other developing markets. The cities we are considering are Indonesia, South Africa, Dubai and Brazil. Some of these countries, we’re launching in this year itself.
MediaNama: What is it that you need to do to expand to these cities?
Shashank ND: Practo search is a portal where patients can find doctors. We have around 120,000 doctors on our portal. Consumers search 4 million times right now for the right doctor for their needs. We need to get more doctors signed up, for example, when we launch in Ahmedabad. Getting doctors listed is completely free for them. Patients can also book appointments for free. We also don’t charge doctors if they get appointments from our portal.
MediaNama: How do you make money?
Shashank ND: We have multiple sources of revenue: We have a premium listing, like how Zomato has the same. The first listing, we’ve mentioned it as a sponsored listing. Hospitals that are listing right on the top, we charge them for the listing space. The source of revenue is a practice management software called Practo Ray, which is sold to doctors on an annual contract basis. It is a tool for doctors to manage their practice, managing the patients health record, the billing and the clinic.
MediaNama: Who owns the patients health records?
Shashank ND: The doctors are primarily the owners of the health records, and the doctors can choose to send it to their patients via email or SMS, and once that is sent to the patients, the patients can own the health records.
MediaNama: So you haven’t looked at the other side of it, where patients can manage their health records?
Shashank ND: Absolutely. That’s exactly where we want to head. The reason we started Practo was that in 2008, my father had a knee replacement surgery, for which I had to get a second opinion. I had to send my dad’s records to a doctor in the US for a second opinion. Because it was paper, I had to take photographs of it, attach it and send it across. I went back to my doctor and asked him why he can’t share a digital copy with me, his response was that he doesn’t have an email button in this software. You’re absolutely right: we want consumers to have access to their own health records and manage them and own them, and we are in the process of making that happen. We are able to get the data digitalized at the doctors end, and with the help of the doctor, we share it with the patient, and the patient will own access and own the records themselves.
MediaNama: How do you get consumers?
Shashank ND: That’s where Practo.com comes in. It’s for consumers, who need to find doctors and book appointments.
MediaNama: Having a search doesn’t get you users. The word still has to be spread. How do you acquire users?
Shashank ND: We have three things, in terms of what consumers want: Consumers want the knowledge of who the good doctors are. They want to book appointments with doctors. Third is that they want to manage the records. Doing the first one is important to manage consumers. That’s where Practo Search comes in. We basically are able to SEO and SEM in a way that anyone searching Google for a good doctor will first find Practo. Through the word of mouth, we’ve been able to spread the word. With the capital we have raised, we will be doing a lot more marketing and awareness about the website, so that consumers will get to know about Practo.com and its features?
MediaNama: What’s the regional expansion going to cost you? Do you need feet-on-street?
Shashank ND: We are about 600 people strong, and expanding to 1500 by the end of the year. Our doctor acquisition mode is definitely feet-on-street. We will need to expand our physical presence to these cities, and physically verifying doctors to ensure that the data coming to our site is accurate and perfect. That is one of the ways we expand and reach our to consumers. Second is that for consumers, we are currently focused on SEM and SEO, using digital means to reach users, using mass media to reach consumers. That will help us in both Tier 1 and Tier 2 cities.
MediaNama: You mentioned Zomato earlier: going out for dinner is a weekly activity, but going to a doctor is not. How do you ensure regular usage of Practo, and is on top of mind for a user?
Shashank ND: You’re absolutely right. People are not looking for a doctor every week. They probably are looking for a doctor once in three months or once in two months. We are doing things that will increase the usage of the app. Primarily, the first one is that we’re increasing the number of segments that we are addressing. Today we are only addressing the doctors. We intend to address diagnostic labs, wellness centers like spas and saloons and hospitals.
MediaNama: Is your business profitable as of now?
Shashank ND: If you look at the Indian business, we are moving towards profitability. We do see a huge scope for further innovation and use of technology in a consumers life and the life of doctors and healthcare institutes. So we are looking at more solutions that will come to market this year itself.
MediaNama: What else can you offer to users and doctors to increase your revenue streams? Any learnings from your international expansion?
Shashank ND: You’re absolutely right. We’re doing rudimentary stuff right now. The initial thing of just finding information and bringing in the convenience of meeting a doctor. In the long term, with health records, we will make it more efficient for them to manage their health. One area of their interest is telemedicine. The use of technology in telemedicine has been increasing in acceptance, and that could potentially be an area of interest. Apart from that, our overall belief is that Practo will help consumers live healthier and longer, and a lot of things can come in, including big data, which can be used to give suggestions to consumers themselves.
MediaNama: That’s something you may not want to get into, right? Because that will involve recommendations and that may put you in a different situation in terms of liability, since you are a platform right now. Isn’t that a different business altogether?
Shashank ND: Absolutely. There’s only so much that technology can do, and a marketplace can do. We’re not trying to replace anyone here. We’ll stick to our limits in terms of being a technology enabler. In the end the consumer has to choose.
MediaNama: So what kind of consumer solutions would you look at?
Shashank ND: We really don’t know. Just in terms of being able to find a doctor and book an appointment, we want to be the best. There’s some way to go for us in India itself. Taking it to 35 cities and expanding to so many segments as well. We have our hands full, and so we haven’t really explored any more options at the moment. With our international expansion, we are trying to reach millions of more users.
Varun Dubey (AVP Marketing, Practo): We’re building certain key pillars right now. Once you have a platform that has multiple of these things (medical records, doctor records), and tied to a person uniquely, those are some interesting play that you could build. What that play is, we haven’t necessarily articulated. We are currently more focused around building the pillars first.
MediaNama: Have you ever had doctors leave you, and what were the reasons that they gave?
Shashank ND: We’ve had very few doctors leave us, and our churn rate is pretty low. The few that have left are probably because they haven’t been able to adopt a software. Adoption has been one of the key reasons.
MediaNama: Do you have tiered solutions?
Shashank ND: We have different packages that we sell to doctors on the basis of their requirement. What Practo has been able to achieve is technology adoption by doctors, because doctors have primarily not been using technology to run their practices.
MediaNama: What soft of incentives do you offer to doctors for coming on board? One is appointments, but anything else?
Shashank ND: We’ve been able to garner a large market share, and there has been word of mouth in the doctor community. Our platform leads to more visibility and that leads to more business, and that is a huge advantage for us.
MediaNama: I’m assuming that in markets like Singapore, doctors already have software. What are the challenges that you’ve faced in those markets?
Shashank ND: What we saw was quite interesting: even though software is more common in those markets than India, the online software wasn’t prevalent in the market. They were all offline in nature. Practo Ray isn’t just online, but also has a mobile application. We were one of the the first online software to enter the market in Singapore and Philippines, and we’ve been able to garner marketshare because of that.
MediaNama: What about data portability from other software to yours? Has that been a problem?
Shashank ND: Most softwares aren’t trying to lock in any doctor. Most of them ensure that data can be brought into and out of it. We have also had the capabilities to ensure that doctors migrating from other software have a seamless experience.
MediaNama: What surprised you most internationally?
Shashank ND: What surprised me most was the opportunity. The opportunity that there was no online software in these markets was surprising: I expected the markets to have other solutions. Even the consumer side: I thought that the problem of finding a doctor and booking an appointment was only prevalent in India, but we found similar problems in Singapore and Philippines as well.
MediaNama: How are you doing on mobile?
Shashank ND: Our iOS app was launched last month, and our Android app was launched six months ago. We have reached the number one position in the health category in both the app stores. We’ve clocked 250,000 downloads. 35% of usage is coming from our mobile apps, considering that the apps are only a few months old.
MediaNama: Is payments something you might get into at any point in time?
Shashank ND: Healthcare has a lot of open opportunities, and we want to make sure that we pick those that we believe have a higher pain point. We have picked these 3 to 4. We have our hands full. We haven’t focused on some of the things at the periphery of what we’re looking to do. But definitely, looking at how payment has evolved in India, I definitely see how digital payments and wallets can help in the health scheme of things.
MediaNama: I see parallels between what Zomato does in its space and what you’re doing in health. They’ve been on an acquisition spree. Would you be looking at acquisitions?
Shashank ND: I thought for a moment that you’re asking us to acquire Zomato (laughs). That’ll be a little tough. We have done quite a few acquires, but we haven’t announced them. We would look at acquisitions in other markets and also India, to increase our product line: some things that are complimentary to what we are doing. For example, someone with a presence in diagnostics, in hospitals. The work that we are about to start. We are exploring a few opportunities as we speak.
Updates: An earlier version of this post had incorrect data for the number of doctors on Practo. That has now been corrected.