Medikabazaar revenue crosses Rs 550 Cr in FY21, inches closer to profitability

Mumbai-based Medikabazaar has made a real impact in the hospital supply space as obvious from its $75 million worth Series C round. It’s also one of the most valued startups in the hospital procurement space as its valuation crossed Rs 1,750 crore [$235 million] during the last fundraise in September. 

The interest of investors such as CREAEGIS and CDC Group who co-led the Series C round had come on the back of Medikabazaar’s strong growth in income and improved financial performance. The company’s operating revenue surged 3.3X to Rs 558.95 crore in FY21 from Rs 168.55 crore in the preceding financial year, according to Medikabazaar’s annual financial statement filed with RoC shows.

Medikabazaar has generated its entire income from the supply of medical instruments, consumables and disposables. The marketplace platform enables hospitals and medical establishments to discover supplies such as devices, materials, medical consumables and dental tools, compare specifications and prices in real-time. 

According to the company, its procurement platform is being used by 70,000 hospitals and healthcare establishments across 20,000 pin codes in the country.

With the spurt in scale, Medikabazaar’s total expenses also ballooned over 3.1X to Rs 598.93 crore in FY21 as compared to Rs 192.85 crore in FY20. Cost of materials forms 78.5% of its total expenditure in the last fiscal year. This cost jumped 3.42X to Rs 470.35 crore in FY21 from Rs 137.33 crore in the previous fiscal year (FY20). 

Employee benefit expenditure has turned out to be the second-largest cost centre for the company in FY21. It recorded a jump of 97% to Rs 36.78 crore during the last fiscal from Rs 18.68 crore in FY20. This expense also includes a non-cash expenditure on ESOPs worth Rs 4.91 crore in FY21 from Rs 1.19 crore in FY20.

In other expenses, advertising cost jumped 343% to Rs 16.48 crore in FY21 from Rs 3.72 crore in the preceding fiscal year (FY20). Information Technology (IT), Transportation and distribution cost also surged 4236% and 224% to Rs 6.07 crore and 23.79 crore in FY21 respectively.

The company gave up  Rs 23.35 crore in FY21 on discounts. This cost increased 178% in the last fiscal year as compared to Rs 8.41 crore in the preceding fiscal (FY20).

While doing all this, Medikabazaar has posted a loss of just Rs 11 lakh in FY21 as compared to Rs 9.26 crore in FY20, placing it at the doorstep of profitability. On a unit level, it spent 1.07 Rupee to earn a single unit of operating revenue.

Helping Medikabazaar last year was the unprecedented spike in demand, as Hospitals and health centres across India rushed to stock up due to the havoc wreaked by the pandemic.  The good part is that, unlike many growth-stage companies, Medikabazaar grew over 3.3X with efficient unit economics. The company seems likely to grow at a quick pace in FY22 and widen its scale in comparison to other players in the hospital supply space.