Tata Digital set to acquire a majority stake in 1MG
BENGALURU: Tata Digital Ltd, the company that houses the Tata group’s digital assets, on Thursday said it is set to acquire a majority stake in online pharmacy 1MG Technologies Pvt. Ltd.
The investment is in line with Tata group’s vision of creating a digital ecosystem that addresses consumer needs across categories in a unified manner, it said in a statement.
This is Tata Digital’s second major investment in an Indian startup this week. On Tuesday, the company announced a $75 million investment in fitness startup CureFit and named its co-founder Mukesh Bansal as president of Tata Digital.
The current deal is a primary and secondary share sale worth $250-$270 million, with other existing investors also infusing capital along with Tata Digital, according to a person who spoke on condition of anonymity. Of the total deal, $160 million will be in the form of primary infusion into the company.
Post the fund infusion, Tata Digital is expected to own almost 60% in 1MG and will increase its shareholding in the e-pharmacy startup in the coming months, the person said.
1MG’s early investors Sequoia Capital India and Omidyar Network India will exit the firm in the next two months, said a second individual with direct knowledge of the discussions. A secondary round will take place as part of this deal in the coming months, this person said.
With the fundraising, 1MG’s valuation is expected to cross $450 million, from close to $270 million before the deal, both the people cited above said.
“The investment in 1MG 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 of Tata Digital.
Tata Digital added that e-pharmacy, e-diagnostics and teleconsultations are critical segments and will form a key element of the digital ecosystem that the company is building.
Incorporated in 2015, 1MG provides online delivery of medicines, health and wellness products, diagnostics services and teleconsultation. “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 highquality healthcare products and services accessible to customers across India,” said Prashant Tandon, co-founder and chief executive of 1MG.
At present, 1MG operates three diagnostics labs and has a supply chain covering over 20,000 pin codes. It is also engaged in business-to-business (B2B) distribution of medicines and other healthcare products.