Phablecare, a Bengaluru-based health-tech start-up, is reportedly experiencing a funding crisis that has led to the laying off of hundreds of employees across various departments since October 2022. In addition to the layoffs, many employees have left the company due to salary payment delays, Inc 42 reported.
Phablecare's financial troubles are the result of high cash burn after its last funding round, which raised $25 million in March 2022 from investors such as Kalaari Capital, Aflac Ventures, SOSV, Omron Ventures and others. It is said that the company has been unable to raise more funds to keep its operations going, leading to delayed salary payments and the subsequent departure of many of its employees.
The start-up has experienced a 5x increase in its net loss to Rs 154.2 crore in the fiscal year 2022, with Rs 78.7 crore of miscellaneous expenses accounting for 45 per cent of total expenses. The company's remaining workforce has shrunk to around 200 employees, down from over 800 in August 2022. Moreover, the day-to-day operations of the start-up have been severely impacted, with the company's customer care number no longer operational.
Phablecare, founded in 2018, provides healthcare services to patients suffering from chronic ailments such as heart disease, cancer, and diabetes, using machine learning-enabled IoT (internet of things) devices. The company also offers online consultations with doctors and medicine delivery services. It has partnered with Healthians, another health-tech start-up, to provide blood testing services.
The situation is reminiscent of MFine, another health-tech start-up that faced financial trouble in 2021 and was eventually acquired by HealthifyMe. With Phablecare's continued layoffs and dwindling workforce, it remains to be seen whether the company can secure additional funding or a merger to stay afloat.
However, later in December 2022, HealthifyMe reportedly laid off 20 per cent of its workforce or 150 employees with an aim to focus on profitability amid the growing concerns of a recession.
Last month, Tiger Global backed health tech unicorn Innovaccer fired around 15 per cent of its workforce, or 245 employees, in the second round of layoffs within four months. The layoffs reportedly impacted employees across teams in India and the US.
