Chose growth over profitability: Core Diagnostics' Zoya on acquisition

India has several venture-backed startups for whom the natural consequence is to have an exit, and between profitability and growth in the journey ahead, "we opted for the latter", Zoya Brar, founder of Core Diagnostics, which was recently acquired by Metropolis Healthcare, said.

Metropolis Healthcare, one of India's leading diagnostics chains, acquired specialised diagnostics company Core Diagnostics for Rs 246.8 crore last month.

"For an organisation to scale, it can either do it organically or inorganically. Since we have a number of venture-backed startups (in India), the natural consequence is, there needs to be an exit. And while IPOs are an option, they need a certain volume and scale before it makes sense. So we will continue to see consolidation," Brar told PTI.

 

"Most importantly, incumbents like Metropolis need to constantly differentiate themselves to remain ahead of the competitive landscape and one simple way to do that is to acquire insurgents that have built an innovative platform," she said.

Core Diagnostics, which started operations in 2012, offers a wide range of diagnostic tests and procedures and was founded "with the mission to make cancer diagnosis accessible for all".

On what prompted the acquisition, Brar said, "The infrastructure needed to build high-end testing is not trivial -- which is part of the reason most people haven't been able to do it. We never cut corners with the goal of building a robust innovative platform."  Brar believes that with Metropolis's "larger reach and network, they can take forward the work we built on and help it scale".

On the future of the employees at CORE following the acquisition, she said, "Our people and our culture weighed in very heavily in Metropolis' decision to acquire us. They have a very mature leadership team and fully recognise the value of retaining what we have built -- people wise."  Reflecting on the deal, Brar said Core Diagnostics was looking more at growth rather than sticking to profitability.

"At every key inflection point in the journey of a startup, it has two choices: solve for profitability, or for growth. Core chose the latter... Metropolis saw that."  "Good companies are never sold, they are bought," she added.