Sequoia-backed MedGenome snaps up diagnostics firm

By Debjyoti Roy

  • 26 May 2023

MedGenome Inc., which counts Sequoia Capital, Novo Holdings and LeapFrog Investments among its key investors, has struck yet another acquisition in the diagnostics sector, two people aware of the development told VCCircle. 

The company, which had earmarked $40 million for acquisitions last fiscal year, has acquired a controlling stake in Delhi-based Prognosis Laboratories, one of the individuals mentioned above said. He declined to reveal the financial terms of the deal. 

The transaction, the person said, will strengthen MedGenome's existing network to cater to a wider population base and accelerate the next phase of growth. 

Mumbai-based boutique investment bank Wodehouse Capital was the exclusive financial advisor on the transaction. 

Founded by Dr Smita Sadwani, Dr Deepak Sadwani and Mayank Madan in 2013, Prognosis provides diagnostics, microbiology and radiology services. 

The company has a test catalogue of over 700 tests spread across pathology, radiology, molecular diagnostics, histopathalogy, biochemistry, immunology and serology among other verticals. 

Besides Delhi, Prognosis has four other branches in Vadodara (Gujarat), Jammu and Kashmir, Lucknow (Uttar Pradesh) and Punjab. 

Email queries sent to MedGenome and Prognosis remained unanswered till the time of filing this article. 

Founded by Mahesh Pratapneni and Sam Santhosh in 2013, MedGenome is a genomics research and diagnostics company that offers a host of products, including genetic testing and drug discovery solutions. MedGenome is the co-founding member of GenomeAsia 100K project and claims to have the largest database of South Asian genetic variants. 

Last November, MedGenome bought Bengaluru-based Trident Diagnostics and Healthcare Pvt. Ltd to offer its genomic tests to clinicians and patients across Karnataka.   

The Foster City- and Bengaluru-based company, during an interaction with VCCircle in October last year, had said that it had signed term sheets to acquire three India-based companies focused on reproduction, oncology and inherited diseases verticals.

It said then that the company, which had raised $50 million in August last year in an investment round led by Denmark’s Novo Holdings, had enough funds to finance the three deals.

In November 2021, MedGenome bought Bengaluru-based Trident Diagnostics and Healthcare Pvt. Ltd to offer its genomic tests to clinicians and patients across Karnataka.  

The company also counts Sofina, Emerge Ventures, Zodius Capital, HDFC, and International Finance Corporation as its investors. MedGenome had raised $55 million in 2020 in a funding round led by LeapFrog. So far, it has raised $185.5 million in several rounds.

India’s preventive healthcare and diagnostics segment is fragmented and dominated by standalone centres. Apart from Apollo and Metropolis, other large chains in the sector include Dr Lal PathLabs Ltd, Thyrocare Technologies Ltd and Fortis Healthcare unit SRL Diagnostics.

The segment has recorded a fair bit of consolidation activity. In April, SRL acquired a Delhi-based pathology lab. In March, Redcliffe Lifetech Pvt. Ltd bought a diagnostic lab chain to offer premium-priced health services.

In February, Goa-based diagnostics chain Molbio Diagnostics Pvt. Ltd acquired a 70% stake in Bengaluru-based Prognosys Medical Systems. Molbio had raised funding from Singapore state investment firm Temasek Holdings at unicorn valuation last September.