MFine merges with LifeCell’s diagnostic arm; joint entity raises $80 Mn

MFine has been exploring merger and acquisition opportunities for the past couple of months as it is left with just a few months of runway. Now, the search is over as the Moore Strategic Ventures-backed firm has announced its merger with LifeCell International’s diagnostic business to create a new entity called LifeWell.

Unlike MFine which was a pure-play marketplace, LifeWell intends to become a full-stack digital health platform in the diagnostic space. Importantly, the joint entity has also raised $80 million in a new round from OrbiMed.

LifeCell’s diagnostics business and MFine claim to have a combined user base of more than six million and growing at over 100% year over year, said the companies in a joint press release. With significant strategic investments and acquisitions, LifeCell targets to serve more than 50 million users over the next four years.

The merger has come two months after a mass layoff at MFine. The company fired 50% of its workforce in May to cut costs and extend the runway. 

MFine has raised around $75 million since its inception including a $48 million Series C round co-led by Moore and Beenext in September last year. The company was valued at around $450-500 million in its last round.

During FY21, MFine’s operating revenue grew over 2.5X  and stood at Rs 12.9 crore while its losses surpassed Rs 102 crore mark during the same period.

Chennai-based LifeCell had raised Rs 255 crore ($33.5 million) in a funding round led by healthcare investment firm OrbiMed Asia Partners IV in September 2021. The company has raised over $40 million from investors including Helion Venture Partners, Brand Capital and its founders.

While LifeCell has raised almost half of MFine’s total funding, revenue-wise - LifeCell is over 20X bigger than MFine. The company’s revenue stood at Rs 234.5 crore in FY21 whereas its losses contracted 83% to Rs 3.8 crore in FY21, as per its annual financial statement with RoC.

LifeCell’ major business comes from its core biz Stem cell banking business which contributed around 60% or Rs 139 crore of the operating revenue in FY21. The company’s collection from diagnostic services grew 77% to Rs 94.4 crore in the fiscal ending March 2021.

Importantly, this is the third major consolidation in the digital healthcare space in the past two years. Last month, Tiger Global-backed Pristyn Care acquired Lybrate in a distress sale. Entrackr had exclusively reported this on May 23.

In June 2020, DocsApp was merged with MediBuddy, a cashless digital healthcare platform for an undisclosed amount. The combined entity also raised $125 million in the Series C round in February this year.