- 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.