Healthtech startup Practo has fired 41 employees as part of its performance management process. In a statement, Practo confirmed the layoffs and said that it was committed to providing support to impacted employees. The company claimed that it was not undergoing any restructuring exercise and that the employees were fired due to performance issues. Practo plans to hire 500 employees in the next 12 months. The move is emblematic of the larger trend of retrenchments that have plagued Indian healthtech startups due to the funding crunch of 2022. These players have largely been in the dock for reasons such as high cash burn, mounting losses, and no clear path to profitability.
The regulatory issues faced by the healthtech space, particularly e-pharmacies, have added to the challenges faced by Indian healthtech startups. There have been concerns about predatory pricing and data privacy, and the government is reportedly considering banning online pharmacies due to these issues. With the funding crunch in 2022 and the uncertain regulatory environment, it remains to be seen how these startups will navigate these challenges and remain sustainable in the long term. The Indian healthtech industry saw a surge in investments in 2021, but as the funding boom subsided in 2022, many healthtech startups have struggled to sustain their operations due to high cash burn rates and mounting losses. Many investors are now seeking to fund companies that have a clear path to profitability, and as a result, some startups have had to downsize or even shut down their operations. It is a challenging time for the healthtech industry, and startups will need to focus on sustainability and profitability in order to stay afloat.