In another trouble brewing for Pristyn Care, the healthtech startup has reportedly suspended the founders of Lybrate, a primary-care company it acquired last year.
Sources told Livemint that the Lybrate’s cofounders Rahul Narang and Saurabh Arora were shown the door for filing a default notice against Pristyn Care for outstanding payments emanating out of the acquisition deal.
Reacting to the reports, a Pristyn Care spokesperson told Livemint, “Pristyn Care has and shall continue to act in accordance with the contractual terms and conditions. Pristyn Care has not defaulted on any of its contractual obligations. At this point, it would be inappropriate to comment on the matter.”
The Tiger Global-backed healthtech startup acquired Lybrate last year for an undisclosed amount in a deal that saw the two cofounders – Narang and Arora – join Pristyn Care. As per reports, the deal was pegged in the range of $20 Mn to $30 Mn, including payments to existing investors such as Nexus Venture Partners and Tiger Global Management.
The drama erupted after the acquisition was executed. As per the report, the investors were paid their respective amounts while the cofounders received only a part of the proceeds. The duo were reportedly promised the remaining payments in two separate tranches – the first one on June 1, 2023 and the second one in 2024.
However, a majority of the payments to Lybrate’s cofounders are yet to go through. “Nearly 60-80% of the payment owed to the founders has not yet been paid,” said a person privy to the development.
After multiple delays, the duo served a notice to Pristyn Care’s operating entity GHV Advanced Care on Tuesday (July 18). In their notice, the Lybrate cofounders reportedly alleged that Pristyn Care ‘failed to acquire the second tranche of shares in Lybrate, as agreed in the original share-purchase agreement.’
The Saga Of Troubles
The new trouble has erupted at a time when Pristyn Care has bogged down by multiple challenges. Amid a full blown funding winter, the startup, in March this year, laid off 300-350 employees, while it claimed, on record, that it only fired 45 employees for performance-related issues.
Not just this, GST officials also visited the premises of Pristyn Care last year seeking clarifications about the startup’s operations. The healthtech platform has also been bogged down by heavy losses which stood at INR 64 Cr in the fiscal year 2020-21 (FY21) against a revenue of INR 64 Cr during the same period.
The company is also yet to file its FY22 financials. With payments due and funding scarce across the ecosystem, it now seems that the acquisition deal has also waded into choppy waters.
Founded in 2018 by Harsimarbir Singh, Vaibhav Kapoor, and Garima Sawhney, Pristyn Care offers advanced secondary care surgeries through its chain of more than 800 hospitals, clinics, and in-house super-specialty surgeons. It claims to offer treatment for more than 50 diseases across 42 cities.
Backed by marquee names such as Peak XV Partners (formerly Sequoia Capital India), Tiger Global, Winter Capital and Eriq Capital, Pristyn Care entered the unicorn club in 2021 after raising a mammoth $96 Mn as part of its Series E round at a valuation of $1.4 Bn.The Gurugram-based startup has raised a funding of more than $177 Mn since its inception.
Pristyn Care competes against the likes of MediBuddy, Practo, and PharmEasy across multiple offerings.
The development comes close on the heels of Inc42 reporting a similar story which elaborated how participants of the show Shark Tank India were facing deliberate delays in investments from sharks under various pretexts.
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