Practo makes offline bet with co-branded dental clinics in Bengaluru, Delhi, Mumbai

China’s Tencent-backed health tech company Practo is making an offline bet with the launch of co-branded dental clinics to further its focus on profitability, top executives at the company told Moneycontrol.

The company is launching a network of dental clinics across tier-one cities in India in partnership with experienced dentists converting their current setup into a tech-led model with high-quality infrastructure. The new Practo Dental clinics will also include aspects of Practo’s existing clinic management offerings.

This comes at a time when the company has shifted focus towards profitability reducing its losses massively to Rs 99.4 crore in FY23 from Rs 236.5 crore in FY22.

“With Practo Dental, what we are doing is supporting that dentist, training their dental staff putting cautiousness and SOPs together, so that there's less risk to the patient, and over some time, create better business, because of all of this for dentists,” said Dr Alexander Kuruvilla, who is the Chief Health Strategy Officer at Practo.

While Practo is beginning its hybrid foray with dentistry, it later also plans to diversify physical offerings for other primary care verticals including dermatology.

The company has hence developed a Clinic Excellence Rating that evaluates the existing setup of doctors on parameters such as infrastructure, equipment, convenience, hygiene, and safety. Kuruvilla added that the partnerships during further expansion into other primary care categories will be based on the above rating system.

Founded in 2008 by Shashank ND and Abhinav Lal, Bengaluru-based Practo is an integrated healthcare company that interconnects the health ecosystem including patients, doctors, hospitals, pharmacies, and diagnostics. Practo also makes software products that help healthcare providers, ranging from small clinics to large hospitals, digitise and deliver healthcare facilities.

The company began working on the foray in the middle of 2023. “We are operational with around 20 clinics with over 30 doctors across Bangalore, Delhi, and Mumbai. They are fully functioning now,” said Rowel Coelho, Business Head, Practo Clinics.

Practo plans to expand this offering to Pune, Hyderabad, and Chennai initially and then eventually reach tier-two cities in the country. “In the next 12 months, we have a target to reach at least over 100 Practo Dental clinics across the country,” said Coelho.

To date, Practo has raised $251 million in 13 funding rounds from investors including Peak XV Partners and Matrix Partners, according to data by Tracxn. In August 2020, it announced its last funding round of $32 million led by Hong Kong-based AIA Group, in a Series D round, reportedly with at least a 50 percent haircut in its valuation.

“With the experience expansion that happens, there is value extraction which makes phygital channels - setup like ours, definitely more sustainable, compared to a standalone digital entity, or a standalone, physical entity,” added Coelho.

To be sure, the company posted flat revenue growth compared to FY22 when it almost doubled over the previous fiscal. In FY22, the company had doubled its operating revenue to Rs 188.9 crore. It stood at Rs 194.53 crore in FY23.

This comes on the back of slowing demand post-pandemic for many e-pharmacies and online medical consultants as people move back to physical pharmacies, trusted clinics, and hospitals.