Medikabazaar, the medical supplies startup, plans to raise $250-$300 million in funding by the end of 2024, reported Businessline. The company wants to expand its operation in the international markets and needs growth capital, said Vivek Tiwari, Founder and CEO of Medikabazaar.
Medikabazaar is India’s one-stop solution for medical supplies. It’s a tech-enabled company providing a complete ecosystem of medical supplies to address irregularities in procurement faced by hospitals and healthcare centres.
Let’s deep dive into its fundraising plans and what it plans to achieve with fresh funds.
Medikabazaar’s fundraising plans
The MedTech startup plans to raise these funds ($250-$300 million) through equity. Medikabazaar’s CEO anticipates this funding round to be one of the most substantial in the healthtech sector.
The startup is seeing increasing interest from sovereign and private equity funds. It claims that the planned fundraiser will be backed by prominent global investors or private equity firms.
According to Crunchbase, Medikabazaar has raised $177 million so far through a mix of debt and equity funding since its inception. Its last fundraise in April 2022 saw participation from renowned investors, including Lighthouse, KOIS Invest, HealthQuad, Creaegis, British International Investment Group and Ackermans & van Haaren.
The founder projected the startup would cross a billion-dollar valuation in the first half of 2022. However, Medikabazaar is yet to enter the unicorn club. While the company is rapidly growing, its current valuation stands at $875 million.
How does the startup plan to use the funds?
Medikabazaar is on the path of expansion and wants to explore domestic and international markets and select inorganic growth prospects. It plans to use the upcoming funding as the growth capital to tap into new markets and establish its presence.
Medikabazaar currently works in 55 Indian cities and has also expanded to the Middle East and North Africa. With a primary focus on tier 2 and 3 cities, it is actively targeting Dubai, Singapore and Chinese markets. The startup anticipates starting operations in 7 markets—India, three in the Middle East and three in Africa—by the end of 2023.
The MedTech startup had done a similar expansion in India, from 30 cities to 55 cities, after raising $75 million in 2021.
Medikabazaar’s offerings and growth prospects
Medikabazaar is a one-stop solution for medical equipment and supplies for hospitals and healthcare providers. It has created an ecosystem to enable a streamlined and transparent digital procurement process for medical supplies.
It operates across various verticals and offers various B2B platforms, like:
- B2B marketplace: One-stop destination to procure medical equipment and supplies
- VPO: An AI and ML-powered smart procurement tool
- Freedom: A medical financing platform
- MBARC: Tech and service solutions for asset [equipment] management, recycling and care
- Vizi: AI for inventory management
- MB Digital Solutions: Healthcare IT and SaaS solutions for the digital transformation of healthcare providers
Medikabazaar’s growth
In the past few years, Medikabazaar has seen immense growth. Its operating revenue grew 3x from ₹564.7 Cr in FY21 to ₹1,552.5 Cr in FY22. That’s a whopping 175% increase.
“Today, we don’t require funds to run our day-to-day operations as the revenues have been growing steadily.”
– Vivek Tiwari, Founder and CEO of Medikabazaar.
When we include other income streams, Medikabazaar’s total revenue has grown 168% to ₹1,600.8 Cr in FY22 from ₹606.9 Cr in FY21.
What’s driving Medikabazaar’s growth?
Medikabazaar’s Value Procurement Optimisation (VPO) model and equipment aggregation model are the key drivers of this rapid growth. Moreover, the B2B online marketplace has bridged the gap between healthcare providers and medical suppliers.
At the moment, Medikabazaar is India’s largest aggregator of medical equipment. Which started as a bootstrapped startup is now a funded company nearing $1 billion valuation.
Its single-point platform reduces the tiresome process of approaching multiple vendors for healthcare providers. Furthermore, Medikabazaar helps healthcare providers save up to 30% on procurement costs, becoming the most-opted B2B marketplace.
With a rapidly expanding pharmaceutical sector in India, the startup is on its way to integrating pharmaceuticals into its business supply chain.
Founded in 2014, Medikabazaar offers more than 1 lakh products, serves more than 15000 hospitals and over 80,000 independent practitioners and facilitates nearly 15000 B2B transactions every month. In the current $10 billion medical equipment market, Medikabazaar represents 6-7% of the entire market opportunity.
Bottomline
2023 has been a difficult year for healthtech startups across the globe due to ongoing funding winter, an increase in inflation, and other macroeconomic conditions.
Galen Growth’s half-yearly report revealed global digital health funding in the first half of 2023 was down by 49%, the worst since Q4 2019.
Several large startups like Pear Therapeutics in the US, PharmEasy in India and others are facing tough times with closures and valuation cuts. While investors are taking a wait-and-watch approach, only a few companies, like Neuralink, RedStart Labs, Fold Health, have been able to raise funds.
As Medikabazaar plans to raise funds, it’ll be interesting to see how it wins investor trust in such turbulent times.
