Pristyn’s biz model Box: The startup’s business model is simple. The company has partnerships with over 800 hospitals through which they let the startup use the vacant operation theatres and rooms to operate on Pristyn’s patients. That way, Pristyn does not invest in physical infrastructure but instead hires its own surgeons, spends on its own clinics – for initial diagnosis – and buys high-grade equipment which may not always be available with the larger players, Singh said.
Pristyn Care, a health tech startup, aims to clock a revenue of Rs 1,000 crore by FY24 as it looks to keep its foot on the accelerator while aiming to minimise its cash burn rate.
The Gurugram-based company said it was likely to end the current financial year with a revenue of Rs 700 crore, double of Rs 350 crore that it clocked in FY22. That was a substantial rise from Rs 96 crore it registered in FY21, when it saw its losses jump 1.9X year-on-year (y-o-y) to Rs 64 crore. While the Harsimarbir Singh-led startup did not shed light on its losses, in December 2021, when it raised $100 million, it said it would turn profitable around June 2023.
Asked if the company was on track, Singh said the company has chosen to grow while burning cash “conservatively” or around Rs 2-4 crore per month to squeeze in extra revenue. He however did reiterate that his company could turn Ebitda positive immediately if it stopped pursuing its growth plans.
Pristyn’s business model is simple. The company has partnerships with over 800 hospitals through which they let the startup use the vacant operation theatres and rooms to operate on Pristyn’s patients. That way, Pristyn does not invest in physical infrastructure but instead hires its own surgeons, spends on its own clinics – for initial diagnosis – and buys high-grade equipment which may not always be available with the larger players, Singh said.
That model augurs well for the startup which said that large hospitals depend on surgeons to bring in patients and drive about 60% of their revenue. Further, a hospital’s OT and bed utilisation capacity has historically trended at around 20%, leaving a lot of space for partnerships like Pristyn’s. In the top 60 cities of India, the utilisation of hospital infrastructure is less than 30%, even in the case of larger chains, the rate goes only as high as 60%.
“All that considered, there is very large, under-utilised medical infrastructure that Pristyn wants to leverage. So, we’re technically an organised version of a practice that has existed for ages but have made it tech-savvy, with a bunch of other amenities and equipment,” Singh explained.
Like in most other sectors, Singh said even the medical/heath tech space was 85% unorganised. Each year, private hospitals in total conduct 40 million surgeries in the elective surgery space, knee replacement and the like, which are non-life threatening, of which Pristyn is able to only do around 0.15 million, highlighting space for growth. Most others are done in government hospitals or other smaller, fragmented players.
Pristyn’s net margin falls in the 10-15% bracket, depending on the category it operates in after sharing its income with hospitals and accounting for other expenses. The company was forced to pivot when Covid struck but it launched its own sanitisers and PPE equipment unit called BeatXP which will now touch an annual recurring revenue (ARR) of Rs 200 crore by March 2022, adding to Pristyn’s revenue growth.
Going forward, the company will explore the international markets, likely start a unit to train nurses and other workers in the hospital space, foray into more advanced robotic surgeries and expand ophthalmology, urology and the hair transplant division, among others.
The company would even weigh further M&As to expedite growth. It had even acquired Lybrate, an online doctor consultation platform, in June 2022. “Given the increasing demand for online health services…We will continue to evaluate strategic M&As down the line however the focus continues to build a sustainable business with stronger unit economics,” Singh said.
Asked on the belt-tightening measures, Singh said Pristyn has been mindful while hiring the 2,000 employees it has and does not need to layoff people to bring costs down. He however did say the company does not go easy on employees who do not meet their performance metrics, “to say the least, we’re ruthless with non-performers,” Singh concluded.
Pristyn Care has so far raised over $180 million – of which the company said 50-60% remains in the banks – from Tiger Global, Sequoia, Epiq Capital and others and is valued at $1.4 billion, according to Tracxn. Founders, Singh, Vaibhav Kapoor and Garima Sawhney together hold around 47% in the company while Sequoia is the largest investor with about 23.14% stake in the company, Tracxn data showed.