Nine years is too long a wait for a return on investment; one year is too tempting a timeline to resist anointing a startup unicorn. This, in a nutshell, sums up what venture capital firm Sequoia India is trying to do with its two portfolio companies—Practo and Pristyn Care.
Since Sequoia first invested in Pristyn Care in October 2020, the elective surgery care provider raised a round in April and is now considering now considering VCCircle Pristyn Care to raise close to $100mn to become unicorn; in talks to buy Practo Read more a third round of $100 million at a ~$1.4 billion valuation. As a common and lead investor in both the companies, Sequoia seems to be backing Pristyn to acquire Practo in what could be a mostly stock deal.
Even though Practo blazed a trail in healthtech with its doctor discovery platform, the company has struggled to break out and turn profitable after 13 years of existence. Having first first The Economic Times Sequioa Capital invests Rs 25 crore in Practo Read more invested in Practo in 2012, Sequoia has continued to infuse funding. As of October 2020, it’s the largest shareholder in the company, boasting a ~30% stake.
Now, it wants to engineer a deal between the two companies. Multiple sources confirmed to The Ken that the talks are somewhat stuck over valuations.
“Pristyn is willing to pay up to $500 million, whereas Practo expects more—close to $800 million,” said sources in the industry. The Ken put this to Pristyn, but the company did not comment on it. Practo did not respond to a detailed questionnaire sent by The Ken. A loss-making company, Practo’s down-round down-round The Ken Practo's chance to regain Paradise Lost Read more in 2020 valued it at ~$330 million, according to documents sourced by The Ken. The company is also believed to have unsuccessfully tried fundraising earlier this year.
Even so, Practo has ventured into Pristyn’s territory of secondary care surgeries, with its new Practo Surgery brand. This was only logical since people close to the company say that, as an out-patients and teleconsultation platform, Practo generated many leads for Pristyn. As much as 30-35%, according to some doctors who work with Practo. The company recently hired Bhavesh Nainani, former Head of Business (Growth) at Pristyn, as a director.