SUMMARY
While Medibuddy didn’t disclose the acquisition cost, its CEO and cofounder Satish Kannan said that it is an all-cash multi-million dollar deal
Over the next six months ‘vHealth by Aetna’ business will transition and will be rebranded as ‘MediBuddy vHealth’
The development comes days after Inc42 exclusively reported that MediBuddy fired 8% of its total workforce as part of a restructuring exercise
Bengaluru-based telemedicine startup MediBuddy on Thursday (February 9) said it has acquired the Indian business of US-based Aetna Inc, vHealth by Aetna to expand its footprint in the country.
Over the next six months, the business of vHealth by Aetna will be rebranded as ‘MediBuddy vHealth’.
While Medibuddy didn’t disclose the acquisition cost, its CEO and cofounder Satish Kannan, in a press meet, said that it was an all-cash multi-million dollar deal.
The startup will fund the acquisition through internal accruals, he added.
vHealth, which was started in 2008 under Indian Health Organisation (IHO) Pvt Ltd, was acquired by Aetna International in 2011. vHealth primarily focuses in the B2B healthcare space and offers subscription-based primary healthcare services such as telehealth consultations, outpatient network, pharmacy, diagnostics and dental among other benefits to customers.
As part of the deal, the entire 180-member team of vHealth will be brought under MediBuddy and will continue to work under Anurag Khosla, CEO of Aetna India and IHO.
Both the existing and new subscriber base of vHealth will have access to MediBuddy’s technology and scale prowess, leading to an enhanced customer experience, the company said in a statement. With the acquisition, vHealth’s customers will be transferred to MediBuddy’s platform, further strengthening its existing customer base of over 30 Mn.
Founded in 2015 by Kannan and Enbasekar Dinadayalane, MediBuddy offers video consultation with doctors, book lab tests, order medicines, and surgicare consultations.
As per Kannan, the acquisition will allow the startup to expand its presence in the BFSI sector and Tier II cities.
vHealth currently has a subscription count of around 1.4 Mn in India. As per Kannan, vHealth will contribute roughly around 30% of MediBuddy’s topline by FY24.
MediBuddy posted a net loss of INR 249.2 Cr in FY22, a 142% increase from INR 102.7 Cr in FY21. Revenue from operations rose 58.6% to INR 234.06 Cr from INR 147.5 Cr in FY21.
Responding to a question about the growing loss, Kannan said that the startup is in growth phase and is in talks to acquire more companies. “We have a strong unit economics. At the phase we are growing, I expect to be EBITDA positive in the next two years,” he added.
The acquisition announcement comes days after Inc42 exclusively reported that MediBuddy fired 8% of its workforce, or around 200 employees, as part of a restructuring exercise.
The startup last raised $125 Mn in its Series C round of funding from Quadria Capital and Lightrock India. It also saw participation from existing investors including Bessemer Venture Partners, India Life Sciences Fund III, Rebright Partners, JAFCO Asia, and TEAMFUND LP. The startup has raised over $200 Mn across multiple rounds till date.
Last year, MediBuddy acquired Clinix, a rural India-focused online consultation platform. Prior to that, it also acquired DocsApp in 2020.
MediBuddy competes against the likes of Pristyn Care, Practo, and PharmEasy.
