Inside Medikabazaar’s crisis: A whistleblower, missing millions, and angry investors

Medikabazaar, once a promising Indian healthtech company, faces a major crisis stemming from a whistleblower complaint revealing widespread financial fraud, leading to investor lawsuits and a leadership overhaul.

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A whistleblower complaint in December 2023 uncovered widespread financial fraud at Medikabazaar
FY23 statements have since been restated to correct inflated revenues, unverified inventory, and false transactions
PwC resigned as auditor after flagging unverifiable inventory and assets, and filing a fraud report with the MCA
Series C investors have triggered a Rs 279 crore indemnity claim, alleging fundraising misstatements
New leadership is attempting a turnaround amid forensic clean-ups and capital pressure

Medikabazaar, the B2B medical supply platform once hailed as a future unicorn in India’s healthtech space, has hurtled from crisis to crisis since a whistleblower complaint in December 2023 accused the then-senior management of fraud. In the 15 months since, the allegations have been validated by forensic audits, its statutory auditor has resigned, and the company has undergone a significant leadership overhaul.

And yet, the company’s troubles are far from over. While Medikabazaar attempts a turnaround, its Series C investors—including Creagis, CDC Group (now BII), HealthQuad, and Ackermans & van Haaren—have activated a Rs 279 crore indemnity claim, demanding accountability for misstatements made during fundraising.

This follows a special notice issued in January by a group of shareholders representing 47.1% of the equity, citing alleged fraud and breach of fiduciary duty. The letter, sourced by The CapTable, was sent by a group of investors, including Arun Venkatachalam, Sunil Kalra, representatives of Rebright Partners, HealthQuad, KOIS Holding, Ackerman & Van Haaren, and others.

How did a company once valued at $700 million and seen as the “Amazon for hospitals” end up here?

The fall & the fallout

In September 2023, when Medikabazaar disclosed to the media its plans to raise $200 million in equity the following year, there was little sign of the storm brewing inside the company. Everything was seemingly hunky-dory. Medikabazaar, started in 2015, was serving 20,000 pincodes through its digital procurement platform, Vizi, and had a presence in financing, asset lifecycle management, logistics, and procurement services.