Cancer care startup Onco pulls down shutters as unit economics bite

Time of India

13 hours ago

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Bengaluru-based cancer care Onco has shut its operations, according to Harsh Pokharna, cofounder and chief executive of fintech firm OkCredit, who had invested in Onco in 2020.Onco provided online consultancy for cancer patients by being an aggregator platform for hospitals. It also allowed patients to book cancer treatment packages , talk to other patients and get medicines delivered.Dr Amit Jotwani, an oncologist, and IIT Kanpur alumnus Rashie Jain founded Onco in 2016. It later got acquired by Apollo Hospitals Group, according to the LinkedIn profiles of the founders.The platform had raised over $7 million from top investors, including Accel and Chiratae Ventures, among others, according to Pokharna's LinkedIn post.'They (Onco) also built a strong brand. At their peak, they had 25,000+ visitors and over 1,000 unique leads (cancer patients) every month—all organic, across their website, app, and social channels,' Pokharna said in his post, adding that they thought hospitals would see value in partnering with it. However, it didn't turn out to be so. He further explained the issues that Onco faced in scaling, despite being backed by venture capital firms and investors.'Hospitals in India hold all the power. They don't really need you. Your margins get eaten alive by collections and compliance costs,' he said.Further, he mentioned that customers don't pay enough for online-only services, and while offline presence is necessary, it is capital-intensive.'Digital is great for leads, but it can't be your whole business. Unit economics just don't work with digital-only solutions because of low ARPU (average revenue per user),' he said. 'Building those offline centres isn't cheap. Each one takes at least 12–24 months to break even.'This development comes at a time when many healthtech startups have entered the segment. Some notable ones include e-pharmacy company PharmEasy, consultation platform Practo, and medicine delivery platform Netmeds, among others.WhiteHat Jr founder Karan Bajaj's new healthtech startup Complement 1, which focuses on cancer care solutions, raised $16 million in a seed funding round led by global venture capital fund Owl Ventures and early-stage investor Blume Ventures last month.Legacy players are also entering the space. For instance, Tata Digital has entered the e-pharmacy industry through 1mg, which operates through an omnichannel model. Apollo Hospitals also has a similar offering through Apollo Pharmacy.E-commerce giant Amazon is the latest to join the race by expanding its healthcare ambitions, entering the at-home diagnostics market, as it looks to position itself as a comprehensive medical services platform beyond online pharmacy and teleconsultation.Meanwhile, new startups like instant medicine delivery firm Plazza and instant diagnostics service provider Zet Health in Bengaluru are also trying to disrupt the segment by tapping into the demand for rapid commerce.