CallHealth to raise Rs 50 crore in latest round, tweaks biz model
The 4-year-old startup with current valuation of $300 million hopes to complete the institutional round of Rs 200 crore by mid-2019.
The Hyderabad headquartered startup, which has so far raised Rs 350 crore from high networth individuals and family offices, recently tweaked its business model and is looking to raise further Rs 200 crore from institutional investors for a national rollout.
Existing investors include Nimmagadda Prasad of Matrix Laboratories, GV Prasad and K Satish Reddy of Dr Reddy’s, Suresh Chittoori of Srinivasa Hatcheries, film stars Akkineni Nagarjuna, Daggubati Venkatesh, Chiranjeevi, and Daggubati Suresh of Suresh Productions, among others.
The 4-year-old startup with current valuation of $300 million (approximately Rs 2,150 crore) hopes to complete the institutional round of Rs 200 crore by mid-2019.
Chief Executive Hari Thalapalli said the healthcare services firm, with 1.5 million registered customers and revenues of Rs 44 crore in 2017-18, has tweaked the business model after testing, validating and improving on some of the experiences on the ground.
“Now, with a right product in hand, we can look at scale. We are now ready for a national launch, which includes 70 cities and around 1,000 towns across the country,” Thalapalli said.
Abandoning an earlier plan of a pan India rollout on its own, CallHealth now prefers a franchise model, where it plans to team up with ecosystem partners – primarily local healthcare services entrepreneurs with infrastructure like nursing homes and clinics.
“CallHealth has now successfully achieved operational breakeven in Hyderabad, where our revenues to expenses are matching out. Now the question is, how do you replicate it in different geographies by on boarding more service providers and partners?,” said Thalapalli.
“CallHealth will essentially be a platform player where medical and technology capability will reside. For delivery capability on the ground, we intend to have it enabled locally,” he added.
Chief financial officer Satish Kottakota said the company has so far divested about 25% equity stake in favour of multiple investors – HNIs and family offices, while the core promoters hold 75% stake.
The franchisee model has also been a cost effective move that has reduced an earlier assessment of around Rs 700 crore for national rollout on its own to Rs 200 crore.
“Most of these Rs 200 crore would go towards customer acquisition because of the franchise model over the next 12-18 months,” said Kottakota. “We are looking to raising these Rs 200 crore from the institutional investors sometime by mid of 2019.”