A whistleblower complaint in December 2023 triggered a crisis at Medikabazaar, a B2B medical supply platform in India. The complaint alleged widespread financial fraud, including inflated revenues, unverified inventory, and false transactions.
Forensic audits have validated these allegations. PwC, the company's auditor, resigned and filed a fraud report with the Ministry of Corporate Affairs (MCA).
Series C investors, including Creagis, CDC Group, HealthQuad, and Ackermans & van Haaren, initiated a Rs 279 crore indemnity claim due to alleged misstatements during fundraising.
The crisis has resulted in a significant leadership change at Medikabazaar. The company is attempting a turnaround, but faces considerable financial pressure and ongoing forensic clean-up efforts. The events raise questions about the company's future and the oversight of investments in the Indian healthtech sector.
Despite publicly announcing plans to raise $200 million in 2024, Medikabazaar was grappling with internal issues. The company, valued at $700 million, served 20,000 pincodes through its platform, Vizi, offering procurement, financing, and logistics services.
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?
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.
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