A month after laying off more than 400 employees in a cost-cutting move, digital health platform MFine will merge with Chennai-based LifeCell International's diagnostics business to form a new joint venture called LifeWell, the company's co-founder Prasad Kompalli said on July 11.
LifeWell raised $80 million from OrbiMed, a healthcare investment firm with $18 billion in assets under management, Kompalli said.
"So we have built a new joint venture, a new entity, between a part of LifeCell's diagnostics business and MFine to create a large-scale digital health services platform but with more lot more full-stack digital capabilities in the diagnostics space," he said.
The Bengaluru-based MFine restructured its business in May to focus more on profitable areas like corporate business, customer acquisition through corporate channels like insurance partnerships, while reducing focus on commodity and healthcare kind of services, Kompalli told Moneycontrol.
The funds raised by LifeWell would also be used for strategic investments in insurance-tech and other partners that would help MFine’s corporate and insurance business channels.
Following the coronavirus outbreak, healthcare services have increasingly become accessible via digital platforms and users expect seamless access to healthcare care practitioners, diagnostics, long-term care plans and personal health data, LifeWell said.
LifeCell’s diagnostics business and MFine would have a combined user base of more than six million, Kompalli said, adding he expected it to grow more than 100 percent on-year over the next six years.
MFine, as a brand, would continue to exist as the consumer-facing platform under the new entity LifeWell, Kompalli said, without disclosing other financial details of the deal.
He also said MFine's offerings such as doctor consults, and care plans, along with tools like blood pressure, oxygen, and heart rate monitoring, would be retained and investments made into these.
LifeWell would leverage LifeCell's diagnostic capabilities and MFine's technology capabilities to build a nationwide lab network by onboarding radiology and pathology lab assets through a roll-up process.
"You can see players are becoming more full-stack. Pharmeasy just had online pharmacy but then they onboarded Thyrocare, which got them the diagnostics business. Apollo did that with their own ventures. So this initiative is the same, MFine has a lot of customers but depends on third-party providers to meet their needs," said Mayur Abhaya, managing director and chief executive officer, LifeCell International.
"It will be offline customers, which walk into the collection centers, in which they do testing with us, and then they will be onboarded onto the MFine platform."
The new entity would not lay off any more employees, Kompalli said. As reported by Moneycontrol, MFine had sacked close to 500 employees. On July 11, MFine said it laid off about 400 employees.
The company was betting on India's healthcare delivery market, one of the fastest-growing in the world, Kompalli said.
LifeWell said that only the outpatient care segment was a $20 billion market, of which about 75 percent was unorganised and non-tech enabled.
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