Tata Digital, a 100 per cent subsidiary of Tata Sons, on Thursday said it would acquire a majority stake in digital health start-up 1MG, continuing its series of investments in the online commerce ecosystem.
The investment in 1MG is in line with the Tata group’s vision of creating a digital ecosystem that addresses the consumer needs across categories in a unified manner, the company said in a statement.
“The investment strengthens Tata’s ability to provide superior customer experience and high-quality healthcare products and services in the e-pharmacy and e-diagnostics space through a technology-led platform,” said Pratik Pal, chief executive officer of Tata Digital.
While the financial details of the deal were not disclosed, sources in the know said 1MG had seen both primary and secondary fund infusion, with some of the early investors exiting. Media reports said the company had received $220 million in primary and secondary investments and had seen participation from some of its existing investors.
1MG has raised a total of $150 million from marquee investors such as IFC, Sequoia India, Omidyar Network, and South Korea’s Redwood Global.
After this acquisition, Tata Digital will have a presence across three key online commerce segments — grocery, lifestyle fitness, and pharmacy. Last month, the company received approval from the Competition Commission of India (CCI) to acquire a majority stake in online grocery player BigBasket. Early this week, it announced an investment of $75 million in Cure.fit and made its founder Mukesh Bansal the president of Tata Digital.
Incorporated in 2015, 1MG has presence in the e-health space and offers a wide range of products like medicines, health and wellness, diagnostics services, and tele-consultation to customers. The company operates three diagnostics labs, has a supply chain covering over 20,000 pin codes across the country, and is also engaged in the business of B2B distribution of medicines and other healthcare products through its subsidiaries.
“We are delighted to join hands with one of India’s most iconic and respected conglomerates. This marks a significant milestone in 1MG’s journey to make high-quality healthcare products and services accessible to customers across India,” said Prashant Tandon, co-founder & CEO, 1MG.
The overall online healthcare market is around $1 billion and expected to grow at 50 per cent CAGR (compound annual growth rate), driven by increased health awareness among consumers and greater convenience provided during the pandemic. This category will form a key element of the Tata Digital ecosystem, said the salt-to-software conglomerate.
Super app ecosystems
Both Tata Sons and Mukesh Ambani-led Reliance Industries (RIL) are on a shopping spree in the e-commerce segment with ambitions to roll out a super app, which would bring several offerings on a single platform.
The online healthcare space has seen a flurry of developments in the past one year with RIL picking up a 60 per cent stake in online pharmacy Netmeds for Rs 620 crore, and unicorn PharmEasy acquiring Medlife for an undisclosed amount, creating the largest e-pharma player.
E-commerce giant Amazon, too, forayed into the online medicine segment and launched Amazon Pharmacy last year. It allows customers to order prescription-based medication in addition to over-the-counter medicines, basic health devices, and Ayurveda medication from certified sellers.
Source: Business-Standard