In a significant management overhaul, Medikabazaar, a prominent B2B startup for medical supplies valued at $650 million, is witnessing the transition of its cofounder and CEO, Vivek Tiwari, to a board role. This move comes amidst ongoing financial scrutiny, with an audit by PwC uncovering discrepancies in the company’s revenue recognition practices.
Leadership Changes
Medikabazaar’s leadership is undergoing a major shakeup, prompted by financial discrepancies identified in a PwC audit. Sources reveal that these issues include incorrect revenue recognition, among other concerns. The audit is nearing completion and will soon be presented to the board and investors.
The company’s board is in the process of finalizing a new CEO, alongside the onboarding of a senior professional management team to bolster operations. Medikabazaar’s spokesperson stated, “The board has been made aware of certain irregularities and, with the support of our investors, conducted an external review. Following the review, we have strengthened our internal control mechanisms and reinforced the executive team.”
Investor Influence and New Appointments
The restructuring at Medikabazaar follows a trend in B2B startups where investors demand thorough audits and management changes to scale businesses effectively. In the past year, several startups, including Medikabazaar, have faced similar scrutiny. Medikabazaar has raised close to $200 million since its inception in 2014, with significant backing from investors like Creaegis, CDC Group, and Lighthouse.
The company recently appointed Ravishankar Gopalakrishnan, former CFO of Jet Airways, as group chief operating officer and whole-time director. Additionally, Raman Chawla, previously with Campus Activewear and Reckitt Benckiser, joined as CFO. Both Gopalakrishnan and Chawla were appointed to the board in May this year.
Industry-Wide Scrutiny
Medikabazaar is not alone in facing investor-driven audits and executive changes. Several venture-funded B2B startups, such as Dealshare, Zilingo, BharatPe, Trell, and Mojocare, have undergone similar reviews, leading to significant operational and leadership shifts. This heightened scrutiny is aimed at addressing and rectifying wrong accounting practices prevalent in the industry.
An industry source noted, “Investors are now extremely cautious about B2B businesses. The diligence process has become much more rigorous before any investment decisions are made.”
Future Outlook
Despite the ongoing challenges, Medikabazaar remains optimistic about its growth trajectory. The spokesperson emphasized, “The company has sufficient funds for its growth plans and remains committed to delivering quality services to its customers. The changes are part of our continuous efforts to strengthen our business operations and governance.”
Stay tuned to ETtech for more updates on Medikabazaar and other developments in the tech and startup ecosystem.
