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Medikabazaar CEO Steps Down Amid Governance & Revenue Recognition Issues

Written by : Jayati Dubey

July 10, 2024

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Source: X (twitter)

A new CEO will replace Tiwari, who will transition to a non-operating role on the board.

Vivek Tiwari, cofounder and CEO of Mumbai-based B2B healthcare supply chain startup Medikabazaar, has stepped down from his operating role. A new CEO will replace Tiwari, who will transition to a non-operating role on the board.

This decision follows a review by accounting firm PwC, which uncovered significant inconsistencies in the company's revenue recognition process and multiple governance issues.

A person familiar with the situation said, "During data validation, they discovered that the gross merchandise value had been inflated by at least 60%. This is a big brand in the medical procurement space."

Reportedly, the PwC auditors found that the gross merchandise value had been inflated by at least 60%.

A spokesperson for Medikabazaar confirmed these findings and stated, "The review found certain weaknesses and deficiencies in internal controls and processes. Following the review, the company has further strengthened its internal control mechanisms and also reinforced the executive team with senior additions."

Medikabazaar, valued at $650 million (INR 4,872 Cr) during its last funding round in April 2022, raised $65 million at that time. The company, which is a decade old, has raised a total of $194 million to date, according to research platform Tracxn.

The company's cap table includes investors such as private equity firms Creaegis and Lighthouse India, sector-focused investor HealthQuad, Japanese VC house Rebright, and Belgian firm Ackerman.

Leadership Changes

The startup is undergoing significant management restructuring. Cofounder Ketan Malkanal, who transitioned from the CFO position in 2023, remains on the board.

The source mentioned earlier said, "The founder [Tiwari] has been sidelined. All CXOs were also under scrutiny, and they are being brought back to work only after the investigation."

Recent appointments include Raman Chawla as the new CFO, a finance veteran with experience at Campus Activewear and Reckitt Benckiser, and Ravishankar Gopalakrishnan as the new COO.

Gopalakrishnan, who joined Medikabazaar in April 2024, has also been appointed to the board as a full-time director. He was previously the acting CEO at Jet Airways and a senior executive at GE Healthcare.

Other board members include Pinak Shrikande of HealthQuad, Nitish Bandi of Creaegis, and Ackerman's Jens Van Nieuwenborgh.

Whether auditors have found evidence of money being siphoned off by Medikabazaar's management remains unclear.

"This has yet to be established. However, what is known is that the same product was sold on the platform multiple times through different entities," a source stated.

Medikabazaar reported revenue of INR 1,552 Cr from operations in FY23, a significant increase from INR 564 Cr the previous year. Despite this growth, the company posted a loss of INR 20.8 Cr in FY23 after two years of profitability. The company's primary revenue source is the supply of medicines.

Medikabazaar has raised substantial funding compared to its competitors, which include Aknamed, IdeaRX, Knya, Drstore Healthcare Services, and Single Dose. Aknamed was acquired by PharmEasy in 2021.


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