Scoop: Bangladesh health startup Praava seeks funding

Praava Health, a startup aiming to transform health care in Bangladesh, is looking to raise $15 million in Series B funding, founder Sylvana Sinha tells Axios.

Why it matters: There is tremendous demand for trusted, quality health care in Bangladesh, yet the government has limited capacity to regulate the industry, Sinha says.

• There’s no primary care, no coordinated care, no insurance, unreliable outsourced diagnostics, perverse incentives for providers, and limited technology, among other issues, according to Praava’s investor report, viewed by Sarah.
• The large prevalence of adulterated and counterfeit medicine sales is problematic, accounting for 20% of all drug sales in Bangladesh, an industry association reported in 2020.

What she's saying: “A lot of people got into health care because of a financial opportunity,” Sinha tells Axios. “The market is not holding providers to quality standards.” Yes, so: Bangladesh is the eighth-most populous country in the world, but citizens are flocking outside of their own borders.

• Over $2.2 billion in health care spending goes outside of the country each year, with 72% of total spending out-of-pocket, per the investor report.
• “People are traveling in the thousands every day for health care, even for primary care,” Sinha says.

Flashback: Praava in March 2021 collected $10.6 million in Series A funding from SBK Tech Ventures; David Howell Petraeus, chairman of the KKR Global Institute; Rushika Fernandopoulle, co-founder of Iora Health; and Geoff Price, co-founder of Oak Street Health, and others.

How it works: Praava has an integrated "brick and click" model that Sinha likens to “One Medical plus Quest Diagnostics plus PillPack under one roof.”

• Praava charges patients a flat rate for unlimited access to all care, which includes both primary care and multi-specialty care.
• In-house it has a diagnostics operation and a pharmacy business.
• Via its SuperApp — Bangladesh's first patient app — digital offerings span telemedicine, e-pharmacy, remote chronic care management and home sample collections.
• It also has EHR, which is unique for Bangladesh.

By the numbers: Praava to date has cared for 350k-plus patients, with more than 1,100 corporate clients and 450-plus employees.

• The startup generated $8 million in revenue in 2021 and was EBITDA profitable.

Yes, and: Praava’s doctors spend an average of 15 minutes with patients, versus the current standard of 48-second patient appointments, Sinha says. Between the lines: Given Bangladesh's current state of health care, building a company that owns supply chain was crucial to ensure quality, Sinha says: "We need to focus on building camels, not unicorns."

• That also drives up margins, with lab tests, in-clinic check-ups, and imaging the top three contributors to its 60%-plus 2021 blended gross margin, per the investor report.

• Its lab, one of five internationally accredited labs in Bangladesh, is its largest and most profitable segment. (In contrast, the U.S. has 32,000 internationally accredited labs.)

State of play: The challenge for Praava is that Bangladesh remains uncharted territory for health care and health tech investors.

• Notable participants in the emerging markets include General Atlantic, which for example, led a $40 million Series B earlier this year in Nigeria's Reliance Health.
• Elsewhere, there's Quadria Capital's Asia-focused PE fund, HealthQuad, with a VC mandate in India, and HealthXCapital, which invests across APAC.

What's next: Another capital infusion would be used to expand both Praava's physical clinic and pharmacy footprint, as well as drive digital expansion. It aims to reach 1 million patients care for by 2024.

• Sinha says she would love to scale this model across emerging markets.

The bottom line: Both the need to raise the health care bar in Bangladesh, and the investment opportunity, are mammoth.

• "We've gotten the economics to work," Sinha says. “Partly because there is very little competition, the opportunity is tremendous.”