INDIA – Cash-crunched digital health platform MFine has merged with LifeCell International’s diagnostic business to create a new entity called LifeWell.

Unlike MFine which was a pure-play marketplace, LifeWell intends to become a full-stack digital health platform in the diagnostic space.

Importantly, the joint entity has also raised US$80 million in a new round from OrbiMed, a healthcare investment firm, which has about US$18 billion in assets under management, a joint statement said.

The merger has come two months after a mass layoff at MFine. The company laid off around 50% of its total workforce in May.

Noteworthy, MFine has raised around US$75 million since its inception including a US$48 million Series C round co-led by Moore and Beenext in September last year.

The company was valued at around US$450-500 million in its last round before its fund crunch led to mass layoffs and now, a merger.

LifeCell’s diagnostics business and MFine claim to have a combined user base of more than six million and growing at over 100% year over year, said the companies in a joint press release.

With significant strategic investments and acquisitions, LifeCell targets to serve more than 50 million users over the next four years.

Importantly, the joint entity has also raised US$80 million in a new round from OrbiMed, a healthcare investment firm, which has about US$18 billion in assets under management.

With this joint venture, we see immense possibilities of delivering on-demand healthcare with outstanding consumer experience,” said Prasad Kompalli and Ashutosh Lawania, cofounders of MFine.

LifeCell, founded in 2004, is a stem cell bank and reproductive genetic testing services provider.

It claims to run a national network of advanced genetic testing laboratories catering to over 3,000 hospitals across 130 cities, with a primary focus on maternal and newborn health.

On the other hand, the 2017-founded MFine offers digital health services for primary, secondary and chronic care.

Following the merger, MFine believes it can “scale rapidly across the country.”

MFine will continue to be the app platform and the consumer brand delivering digital healthcare services and tools following the merger.

The capital raised will also be used for strategic investments in insurance-tech and other partners to boost MFine’s corporate and insurance channels, the statement said.

LifeCell’s recent funding rounds

Chennai-based LifeCell had raised Rs 255 crore (US$33.5 million) in a funding round led by healthcare investment firm OrbiMed Asia Partners IV in September 2021.

The company has raised over US$40 million from investors including Helion Venture Partners, Brand Capital and its founders.

LifeCell’ major business comes from its core biz Stem cell banking business which contributed around 60% or Rs 139 crore (US$17.5 million) of the operating revenue in FY21.

The company’s collection from diagnostic services grew 77% to Rs 94.4 crore (US$11.9 million) in the fiscal ending March 2021.

Importantly, this is the third major consolidation in the digital healthcare space in the past two years. Last month, Tiger Global-backed Pristyn Care acquired Lybrate in a distress sale. 

In June 2020, DocsApp was merged with MediBuddy, a cashless digital healthcare platform for an undisclosed amount. The combined entity also raised US$125 million in the Series C round in February this year.

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