After Flipkart & Makemytrip, will healthcare industry give India its next big internet business?
Over
the past decade-and-a-half, different startups have leveraged the
internet to ease the day-to-day lives of consumers.
The first big opportunity arose when Makemytrip and its rivals revolutionized the travel industry by overhauling travel bookings; then Flipkart showed how to build a billion-dollar business by bringing modern retail to the computers (and mobiles) of consumers.
Most recently, the likes of Zomato, BookMyShow and Justdial have shown how the internet can be used to re-architect the food and beverage, events and local search spaces, respectively.
Now, a clutch of companies is looking to do the same with healthcare — specifically the chaotic and fragmented business for medical practitioners — and build the next big internet business out of India.
The first big opportunity arose when Makemytrip and its rivals revolutionized the travel industry by overhauling travel bookings; then Flipkart showed how to build a billion-dollar business by bringing modern retail to the computers (and mobiles) of consumers.
Most recently, the likes of Zomato, BookMyShow and Justdial have shown how the internet can be used to re-architect the food and beverage, events and local search spaces, respectively.
Now, a clutch of companies is looking to do the same with healthcare — specifically the chaotic and fragmented business for medical practitioners — and build the next big internet business out of India.
These
companies, ranging in age from six years (like the sector's
proverbial 800-pound gorilla Practo) to those that are barely a year
old, are using the internet to aggregate and organize data on
doctors, clinics, hospitals and other healthcare businesses, and
provide a platform for consumers to access them.
Then,
some of them are targeting the doctors themselves. They have jumped
into the heart of a doctor's business — patient appointments,
records and billings — to try to digitize what have been sheaves of
paper.
In the past year and more, these companies have been gaining significant traction — market leader Practo to date has managed some 15 million records and booked 16.6 million appointments with 109,000 doctors across 351 towns and cities — even as investors, eager for their next big payout after e-commerce, begin to bite.
Investors Pop the Pill
The likes of Sequoia Capital and Nexus Venture are just a couple of venture capitalists that have backed firms in this space, even as others such as Matrix Partners weigh investments in this burgeoning market.
Avnish Bajaj was one of the early success stories of India's internet revolution — a startup called Bazee.com he cofounded was sold to eBay a decade ago for $55 million in 2004.
Now, he thinks the healthcare market could spawn India's next big internet smash hit. And, as the founder of Matrix Partners, an early-stage investor, he's keenly watching this space.
"India is mainly a cash economy for healthcare and people have a choice of which doctor to approach unlike the West, where you're forced to choose from a predetermined pool due to insurance restrictions," he says.
However, this choice is a doubleedged sword, since reaching these doctors isn't easy. Enter the online facilitators.
"These companies can solve a pressing consumer problem and in the process build a large and scalable internet company. Why can't the next Zomato be from the healthcare space?" wonders Bajaj. Entrepreneurs seem to agree.
"The use of technology in healthcare is limited, especially for a consumer," says Shashank ND, cofounder of Bangalore-based Practo. "Finding a doctor, booking an appointment and getting a bill and the overall experience at a clinic or hospital are, for a consumer, a poor experience."
In the past year and more, these companies have been gaining significant traction — market leader Practo to date has managed some 15 million records and booked 16.6 million appointments with 109,000 doctors across 351 towns and cities — even as investors, eager for their next big payout after e-commerce, begin to bite.
Investors Pop the Pill
The likes of Sequoia Capital and Nexus Venture are just a couple of venture capitalists that have backed firms in this space, even as others such as Matrix Partners weigh investments in this burgeoning market.
Avnish Bajaj was one of the early success stories of India's internet revolution — a startup called Bazee.com he cofounded was sold to eBay a decade ago for $55 million in 2004.
Now, he thinks the healthcare market could spawn India's next big internet smash hit. And, as the founder of Matrix Partners, an early-stage investor, he's keenly watching this space.
"India is mainly a cash economy for healthcare and people have a choice of which doctor to approach unlike the West, where you're forced to choose from a predetermined pool due to insurance restrictions," he says.
However, this choice is a doubleedged sword, since reaching these doctors isn't easy. Enter the online facilitators.
"These companies can solve a pressing consumer problem and in the process build a large and scalable internet company. Why can't the next Zomato be from the healthcare space?" wonders Bajaj. Entrepreneurs seem to agree.
"The use of technology in healthcare is limited, especially for a consumer," says Shashank ND, cofounder of Bangalore-based Practo. "Finding a doctor, booking an appointment and getting a bill and the overall experience at a clinic or hospital are, for a consumer, a poor experience."
The
chaos — a large market, multiple customer pain points and a lack of
technology in healthcare — may be an ideal setting for the likes of
Practo. "The use of technology can revolutionize customer
experience in this industry," says Shashank.
His firm, he contends, has proven this business is viable. "Practo Ray, the practice management software, has become dominant in its field — 15% of doctors use some form of this software and 90% of them use our product," he claims.
Products such as Practo Ray have helped overhaul the perception of a doctor's business. Users can get printed — rather than illegibly-scrawled — prescriptions, appointment reminders are messaged to patients and invoices digitally stored. "We have upgraded the customer experience," he says.
Virtual Remedies
This is just the reason Hemanshu Mehta, a dentist with a clinic in Mumbai's Sion suburb, signed up with Practo. The clinic, which is usually
His firm, he contends, has proven this business is viable. "Practo Ray, the practice management software, has become dominant in its field — 15% of doctors use some form of this software and 90% of them use our product," he claims.
Products such as Practo Ray have helped overhaul the perception of a doctor's business. Users can get printed — rather than illegibly-scrawled — prescriptions, appointment reminders are messaged to patients and invoices digitally stored. "We have upgraded the customer experience," he says.
Virtual Remedies
This is just the reason Hemanshu Mehta, a dentist with a clinic in Mumbai's Sion suburb, signed up with Practo. The clinic, which is usually
packed
through the week, needed a software package to manage patient
appointments and records and help the doctor access them on the go.
"Earlier, five out of 10 patients would give us excuses for not
turning up," says Mehta between appointments.
"Now,
they get a call and an automated text message reminder to keep them
updated." Recently, the doctor has also begun to use Practo
Hello, a virtual receptionist, to add another layer of technology to
his operation. This tool, he adds, allows him to track the booking of
appointments, access patient records and data — and reach out to
them directly — while he is on the move. "Patient care has
become much more manageable and flexible with these tools," he
says.
Despite
having a head start, doctors and other healthcare workers say
Practo's rivals have been aggressively trying to get them to switch
over to their software. A psychiatrist in Mumbai says he has been
approached by sales teams from several of these firms — with the
offer of lower subscription costs, three-months' free trials and
personalized support from the CEO to try to win him over.
"We want consumers to avoid the fear of the unknown in making healthcare decisions," says Saurabh Arora, a co-founder of Lybrate, which helps consumers find and book appointments with doctors, and helps the doctors get rid of paper records.
"We want consumers to avoid the fear of the unknown in making healthcare decisions," says Saurabh Arora, a co-founder of Lybrate, which helps consumers find and book appointments with doctors, and helps the doctors get rid of paper records.
Arora,
who was working as a data scientist at Facebook before starting up,
got together with his friend Rahul Narang (an early hire for
e-tailing major Snapdeal) to found this venture. In this space,
Lybrate is the fledgling — barely 18 months old — and is seeking
to make up with nimbleness what it lacks in business experience.
"We tested our mobile-first product with around 100 doctors, which differentiates us from some of our rivals," argues Arora. This means doctors and patients have two-way access on a mobile device to upload and review medical records and the application itself "can be used by anyone who can operate a smartphone."
While doctors, especially general practitioners, have been typically referred by friends and family (including those who visit homes to look up the ailing), this system has been under threat as people have relocated for work. For example, Rupa Iyer, a software pro, grew up in Chennai and went to college in Bangalore.
However, her first job was in Gurgaon and her current role has taken her to Mumbai — both cities alien to her. "I couldn't rely on my family physician on the phone for each cold I got," she says. "Instead, the internet has come to my rescue to locate referenced physicians and specialists in both cities."
Investors seem to like this consumer sentiment. "These companies are just beginning to organize what is a fragmented and disorganized market," says serial entrepreneur and angel investor Vishal Gondal. "Just like Justdial did with listings and BookMyShow did with the business of entertainment, these firms can have a similar impact on the healthcare business."
The Hidden Inventory
Amit Bansal, co-founder of Helpingdoc, which raised Rs 10 crore in venture capital from Senior Marketing Systems of Singapore, started up his venture because the firm's co-founder Hemant Singhal, a cancer surgeon by training, had been hassled multiple times to locate and book appointments with doctors of various hues.
As a doctor at Medanta, a multispecialty hospital in Delhi, Singhal spent half his time making appointments for friends and family, says Bansal. "It is so difficult to find a good specialist," says Bansal.
"People crowd specialty hospitals for primary care, even though there are hundreds of capable physicians outside. We want to expose this hidden inventory." Helpingdoc, which went live in April 2012, has around 4,000 doctors on its database and wants to increase it to 20,000 in 18 months.
Bansal isn't the only one with big plans for his startup. Shantanu Jha, co-founder of Doc-Suggest, which counts investors such as Google India head Rajan Anandan and Gondal as early investors, has extended his business beyond doctors. His startup, which was rebranded Ziffi.com a couple of months back, raised Rs 15 crore in funding from Orios Fund, an earlystage investor, recently. Ziffi now wants to be a key player in the broader wellness space rather than just an online platform for doctors and patients to network.
Ziffi's eponymous software is used by an assortment of clinics, diagnostic centres, salons and spas to reach customers. "A user needs to visit a specialist doctor once or twice a year," says Jha. "We, however, want our platform to be accessed more often and in the limited real estate (screen size and space) of a mobile phone we need to be more visible."
IIn the five years it has been in operation (as DocSuggest and more recently Ziffi), the Hyderabad-based firm has signed up with 17,000 doctors in four cities (Hyderabad, Mumbai, Bangalore and NCR) and some 5,000 clinics, diagnostic centres, salons and spas. "We're just getting started," says Jha. "In the next 18 months, we want to enlist 50% of the entire service provider network and have at least 50,000 of them signed up with us."
Hemant Kumar, a 30-year-old pharma sales manager, defines the kind of user these firms vie to attract. As a new resident of Delhi — and a stranger to India's capital — he relied on Doc-Suggest to find himself a GP when he had the flu in December 2012. Then, he added an orthopaedic specialist to deal with a troublesome knee. "The internet is the first place I use to search for books, food and electronics. Why not doctors," he says.
"We tested our mobile-first product with around 100 doctors, which differentiates us from some of our rivals," argues Arora. This means doctors and patients have two-way access on a mobile device to upload and review medical records and the application itself "can be used by anyone who can operate a smartphone."
While doctors, especially general practitioners, have been typically referred by friends and family (including those who visit homes to look up the ailing), this system has been under threat as people have relocated for work. For example, Rupa Iyer, a software pro, grew up in Chennai and went to college in Bangalore.
However, her first job was in Gurgaon and her current role has taken her to Mumbai — both cities alien to her. "I couldn't rely on my family physician on the phone for each cold I got," she says. "Instead, the internet has come to my rescue to locate referenced physicians and specialists in both cities."
Investors seem to like this consumer sentiment. "These companies are just beginning to organize what is a fragmented and disorganized market," says serial entrepreneur and angel investor Vishal Gondal. "Just like Justdial did with listings and BookMyShow did with the business of entertainment, these firms can have a similar impact on the healthcare business."
The Hidden Inventory
Amit Bansal, co-founder of Helpingdoc, which raised Rs 10 crore in venture capital from Senior Marketing Systems of Singapore, started up his venture because the firm's co-founder Hemant Singhal, a cancer surgeon by training, had been hassled multiple times to locate and book appointments with doctors of various hues.
As a doctor at Medanta, a multispecialty hospital in Delhi, Singhal spent half his time making appointments for friends and family, says Bansal. "It is so difficult to find a good specialist," says Bansal.
"People crowd specialty hospitals for primary care, even though there are hundreds of capable physicians outside. We want to expose this hidden inventory." Helpingdoc, which went live in April 2012, has around 4,000 doctors on its database and wants to increase it to 20,000 in 18 months.
Bansal isn't the only one with big plans for his startup. Shantanu Jha, co-founder of Doc-Suggest, which counts investors such as Google India head Rajan Anandan and Gondal as early investors, has extended his business beyond doctors. His startup, which was rebranded Ziffi.com a couple of months back, raised Rs 15 crore in funding from Orios Fund, an earlystage investor, recently. Ziffi now wants to be a key player in the broader wellness space rather than just an online platform for doctors and patients to network.
Ziffi's eponymous software is used by an assortment of clinics, diagnostic centres, salons and spas to reach customers. "A user needs to visit a specialist doctor once or twice a year," says Jha. "We, however, want our platform to be accessed more often and in the limited real estate (screen size and space) of a mobile phone we need to be more visible."
IIn the five years it has been in operation (as DocSuggest and more recently Ziffi), the Hyderabad-based firm has signed up with 17,000 doctors in four cities (Hyderabad, Mumbai, Bangalore and NCR) and some 5,000 clinics, diagnostic centres, salons and spas. "We're just getting started," says Jha. "In the next 18 months, we want to enlist 50% of the entire service provider network and have at least 50,000 of them signed up with us."
Hemant Kumar, a 30-year-old pharma sales manager, defines the kind of user these firms vie to attract. As a new resident of Delhi — and a stranger to India's capital — he relied on Doc-Suggest to find himself a GP when he had the flu in December 2012. Then, he added an orthopaedic specialist to deal with a troublesome knee. "The internet is the first place I use to search for books, food and electronics. Why not doctors," he says.
The
Challenges
Part of the challenge for these firms may be discovering ways to monetize their business, and they're adopting different revenue models to for growth. While some offer ordinary consumers free access to their database (while charging doctors a fee), others have a more hybrid offering, where they get a sliver of the fee paid by patients to doctors. Then, other firms offer value-added services such as Practo's Practo Hello Virtual Assistant to try to increase revenues. "Most companies are just discovering different business models and it will take a couple of years before they are set," says investor Gondal.
Entrepreneurs themselves aren't getting too worried about finding the right business model. Instead, they are looking forward to the next big technology leap. "We want to make a doctor's clinic mobile," says Shashank of Practo. "Today, 10,000 doctors use our software on the go." Practo claims to be the second largest venture in its space globally and says it is hunting for acquisitions to grow.
Two years ago, Practo expanded into Singapore and now wants to extend its reach into other countries — starting with neighbouring locations in the Asia Pacific region. The firm is expected to raise a new round of VC funding — with existing investors such as Sequoia interested in taking part — to fuel this growth.
With over 10 lakh doctors in India and 350 medical colleges (the largest number globally) churning out some 50,000 graduates annually, these online intermediaries may just be getting started with their business. Add to that the thousands of wellness professionals and these firms may have their hands full for some time to come.
Along the way, they will also hope to crystallize a business model that will make one or several of them the next billion dollar startups from India.
Part of the challenge for these firms may be discovering ways to monetize their business, and they're adopting different revenue models to for growth. While some offer ordinary consumers free access to their database (while charging doctors a fee), others have a more hybrid offering, where they get a sliver of the fee paid by patients to doctors. Then, other firms offer value-added services such as Practo's Practo Hello Virtual Assistant to try to increase revenues. "Most companies are just discovering different business models and it will take a couple of years before they are set," says investor Gondal.
Entrepreneurs themselves aren't getting too worried about finding the right business model. Instead, they are looking forward to the next big technology leap. "We want to make a doctor's clinic mobile," says Shashank of Practo. "Today, 10,000 doctors use our software on the go." Practo claims to be the second largest venture in its space globally and says it is hunting for acquisitions to grow.
Two years ago, Practo expanded into Singapore and now wants to extend its reach into other countries — starting with neighbouring locations in the Asia Pacific region. The firm is expected to raise a new round of VC funding — with existing investors such as Sequoia interested in taking part — to fuel this growth.
With over 10 lakh doctors in India and 350 medical colleges (the largest number globally) churning out some 50,000 graduates annually, these online intermediaries may just be getting started with their business. Add to that the thousands of wellness professionals and these firms may have their hands full for some time to come.
Along the way, they will also hope to crystallize a business model that will make one or several of them the next billion dollar startups from India.
By
Rahul Sachitanand, ET 30 Nov, 2014
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