DiagRight offers an aggregation platform for phlebotomists – paramedics who collect blood samples from customers and then deliver it to nearest laboratories
We want to create an Uber-like platform where paramedics can register with us and offer freelance services for the end user: Cofounder Biswabhusan
DiagRight has an annual recurring revenue (ARR) of $3.6 Mn and records monthly revenue upwards of INR 2.6 Cr
The COVID-19 pandemic gave a massive boost to the health sector in the country. It led to governments ramping up public expenditure on health. This was clearly visible when the combined budgeted health expenditure of the state and central governments shot up to 2.1% of the GDP in financial year 2021-22 (FY22) from 1.3% in fiscal year 2019-20.
The pandemic also brought a renewed focus on the healthtech sector. In the absence of in-person doctor appointments, the Indian startup ecosystem began scaling up options such as teleconsultations and epharmacy to cater to the growing demand of Indian consumers.
Amidst all these, entrepreneurs Jenamani Asitranjan Biswabhusan and Puneet Sharma realised that there was a major gap in the doorstep pathology service. Speaking to Inc42, Biswabhusan said, “It came to our realisation that big healthtech companies and startups in India plateaued after four to five years. We tried to look for the missing link. These companies had the best resources and manpower but still couldn’t circumvent this plateau trend which stagnated these firms.”
While these companies spent a lot on generating demand, Biswabhusan said he believed that demand was always there and it was more about reaching the underpenetrated markets.
“These healthtech companies were focused on generating demand, spending high volumes of money on customer acquisition costs for adding new users. But demand has always been there, especially in the pathology selector, but it is about reaching every nook and corner of the country, not just metro and Tier-1 cities. With this idea, we created DiagRight,” he added.
Founded in 2020 by Biswabhusan and Sharma, Gurugram-based DiagRight aims to standardise last-mile delivery of physical healthcare infrastructure. The startup provides pathology services by building an ecosystem of ‘standardisation and convenience’.
It offers an aggregation platform for phlebotomists – paramedics who collect blood samples from customers and then deliver it safely to nearest laboratories or collection centres.
“We want to create an Uber-like platform where paramedics can register with us and offer freelance services for the end user,” said Biswabhusan.
What Is The Business Model?
Sharma said that the startup deploys a multi-stage process to cross-check and verify data of the phlebotomists working with DiagRight. “We take inputs from applicants and then verify their payment and know your customer (KYC) details. We also follow their qualification trail and employ personnel to verify all these claims. This helps us weed out the erring applicants,” he said.
DiagRight claims to have more than 34,000 phlebotomists across 200 cities registered on the platform. Of these, the startup claims to have more than 4,000 such personnel actively employed on the ground.
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Overall, the startup has three parallel revenue streams which it intends to scale up further. It offers three services – Test-as-a-Service (TaaS), Phlebotomists-as-a-Service (PaaS) and Enterprise-as-a-Service (EaaS).
Under TaaS, DiagRight offers standalone sample collection and reporting services. Under this, the customer picks a lab of his/her choice and afterwards a DiagRight representative picks up the sample and delivers it to the lab, which subsequently sends the digital report to the customer.
On the other hand, PaaS is a B2B service targeted at labs. Under it, the clients can outsource the requirement of phlebotomists to DiagRight. The startup charges such clients INR 250 on a per user basis.
EaaS is the biggest revenue generator for the startup. “In the EaaS model, we are responsible for everything from booking to service and from sampling to picking up reports for our customers. Companies tell us to acquire users for us and that is what we do under this model,” Puneet Sharma said.
Giving a split of revenue, Sharma said that EaaS contributes 70% to the startup’s revenue, while PaaS accounts for 20% of its revenue. The test service contributes a meagre 10% to the total revenue.
The startup charges INR 250/person for its phlebotomists service and INR 700/person for its enterprise service. For TaaS, it works with labs on a revenue sharing basis, taking a cut of 30-50% per transaction.
Sharma said that the company has an annual recurring revenue (ARR) of $3.6 Mn (INR 27-28 Cr) and is recording a monthly revenue of over INR 2.6 Cr. The startup currently offers its services across 26 cities, including New Delhi, Lucknow, Jaipur, Chandigarh, among others.
Future Plans And The Ever-Growing Indian Market
While the B2B vertical continues to be the core focus, DiagRight also intends to ramp up its D2C (TaaS) vertical. Sharma said that the startup aims to increase the contribution of the D2C vertical to the company’s total revenue to 30%.
The startup has close to 140 employees, apart from thousands of phlebotomists that it hires as gig workers.
DiagRight’s founders said that the startup wants to continue to invest in infrastructure and product development. Besides, it is also mulling acquisitions of labs as it looks to expand its offerings.
India’s ehealth market is expected to reach the $10.6 Bn mark by 2025. As per an Inc42 report, this would still be a mere 1.6% of the total addressable healthcare market, which is slated to reach $638 Bn by 2025.
According to another report, India’s diagnostic labs market is expected to grow to $25.66 Bn by 2027, growing at a CAGR of 11.65% between 2023 and 2027.
Considering the growing demand for ediagnositc platforms in the country, the Federation of Indian Chambers of Commerce and Industry (FICCI) last month unveiled a self-regulatory code of conduct for these platforms.
India has 5,295 healthtech startups at the end of 2020, and the number is expected to have grown multifold from then. The ediagnostics space in India includes players such as MediBuddy, NetMeds, Flebo, among others.