Pristyn Care Experiences Major Executive Departures and Cost-Cutting Amid Financial Strain
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Synopsis
Pristyn Care, a health-tech unicorn, is facing significant executive exits due to cost-cutting measures amid ongoing cash flow issues and rising expenses. The lack of fresh funding has led to layoffs and restructuring efforts as the company struggles to maintain its business model.
Key Takeaways
- Pristyn Care is undergoing significant executive departures.
- The company is implementing cost-cutting measures due to cash flow issues.
- Senior leaders, including the VP of Finance, have resigned recently.
- Financial reports show a significant increase in total expenses.
- Legal disputes with former partners further complicate matters.
New Delhi, Feb 13 (NationPress) The health-tech unicorn Pristyn Care is encountering a wave of significant executive departures as part of its cost-reduction initiatives, grappling with cash flow challenges, increasing expenditures, and a lack of new financing to maintain its operational framework.
The startup, supported by Peak XV Partners (previously Sequoia Capital India & SEA), has witnessed numerous senior leaders resign in recent months, alongside the termination of several junior and mid-level staff as part of its cost-reduction efforts.
One notable exit is Prabhat Agarwal, Senior Vice President of Finance, who has resigned and is currently in his notice period, according to media reports. Nevertheless, the company asserted that he remains “on the rolls”.
Furthermore, Tarun Bansal, Senior Vice President of Business and Operations, stepped down in June 2024, as indicated on his LinkedIn profile.
Other significant departures include Srinivas Reddy P, Senior Vice President of Human Resources, and Gagan Arora, Head of Marketing, both of whom left the organization last year.
The company has also implemented a workforce reduction at junior and mid-management levels over the past two months, citing underperformance as the cause.
However, its financial reports indicate that the layoffs are likely a reaction to a severe cash shortage.
Pristyn Care’s financial data, reviewed by IANS, shows escalating pressure on its resources.
The company’s total expenditure surged to Rs 1,013 crore in FY24, up from Rs 876 crore the prior year, while its operational revenue increased to Rs 600 crore in FY24 from Rs 452 crore in FY23, according to its filings.
Despite revenue growth, Pristyn Care’s cash flow remains unclear, as cash flows from operating, investing, and financing activities are classified as abstract in its filings, indicating liquidity issues.
In June 2022, Pristyn Care acquired the telemedicine platform Lybrate for an estimated $20-30 million to broaden its reach into primary healthcare.
Nevertheless, the company no longer values the acquisition and has been gradually discontinuing the platform since last year.
Most employees from Lybrate have either been reassigned to different divisions or have left the company.
Compounding its difficulties, Pristyn Care is involved in a legal dispute with Lybrate co-founders Saurabh Arora and Rahul Narang, according to reports.
The duo has accused Pristyn Care of not paying the complete acquisition amount and has initiated arbitration proceedings in a Delaware court as of December 2023, seeking $13 million in damages.
Last year, the healthcare organization eliminated several hundred positions in what appeared to be a restructuring process, affecting employees across various teams.
