Pristyn Care, a health-tech startup backed by Peak XV Partners (formerly Sequoia Capital India & SEA), is facing leadership exits struggling along with cash flow challenges and rising operational costs. The company has seen multiple senior executives resign while laying off several employees as part of a cost-cutting strategy. With the absence of new funding, Pristyn Care is making changes to sustain its business, but financial troubles continue to mount.
Senior Leaders Exit Amid Cost-Cutting Measures
In recent months, several top executives have left the company. Among them is Prabhat Agarwal, Senior Vice President of Finance, who has stepped down and is currently serving his notice period. However, the company has stated that he is still officially employed. Another key resignation is Tarun Bansal, Senior Vice President of Business and Operations, who left in June 2024, as confirmed by his LinkedIn profile.
Other major exits include Srinivas Reddy P, Senior Vice President of Human Resources, and Gagan Arora, Head of Marketing, both of whom left the company last year. In addition to leadership departures, junior and mid-level employees have also been impacted by layoffs, with the company citing underperformance as the reason. However, financial data suggests that these job cuts are likely driven by cash flow problems rather than performance issues.
Rising Expenses and Revenue Growth in FY24
Pristyn Care’s financial records indicate that its total expenses increased to Rs 1,013 crore in FY24, up from Rs 876 crore in FY23. At the same time, the company’s operating revenue grew to Rs 600 crore in FY24, compared to Rs 452 crore in the previous year. Despite this revenue growth, cash flow concerns persist, as the company has marked its financial transactions related to operations, investments, and financing as abstract in its filings. This classification suggests liquidity issues that could affect its ability to sustain business operations.
Lybrate Acquisition Fails to Deliver Expected Value
In June 2022, Pristyn Care acquired the telemedicine platform Lybrate for an estimated $20-30 million, aiming to expand its presence in primary healthcare. However, the company has since determined that the acquisition no longer aligns with its business strategy. Over the past year, it has been phasing out Lybrate, with many of its employees either reassigned to other departments or let go.
Adding to its financial struggles, Pristyn Care is now involved in a legal dispute with Lybrate’s co-founders, Saurabh Arora and Rahul Narang. The co-founders have accused Pristyn Care of failing to pay the full acquisition amount and have taken legal action in a Delaware court, seeking $13 million in damages.
Pristyn Care had previously conducted mass layoffs last year, affecting hundreds of employees across different teams as part of a restructuring effort. While the company continues to expand its healthcare services, its financial instability, leadership changes, and legal challenges raise concerns about its future growth. Unless it secures fresh funding or finds a way to stabilize cash flow, Pristyn Care may continue to face operational hurdles and employee reductions in the coming months.
