India: Online pharmacy 1mg enters unicorn club after $40m fundraise led by Tata Digital

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Online pharmacy chain 1mg has entered the unicorn club after raising $40 million in fresh funding from Tata Digital, a 100% subsidiary of Tata Sons Private Limited, and other investors.

Unicorn is a moniker used to describe privately held companies valued at $1 billion and more.

Tata Digital, which acquired a majority stake in 1mg in June last year, led the financing with an infusion of about $32 million. AG’s subsidiary, KWE Beteiligungen, and HBM Healthcare Investments put in $2.35 million and $2 million, respectively, per an Entrackr report.

Others who participated in the funding include MPOF Mauritius, MAF Mauritius and individual investors Rubal Jain (Safexpress) and Vardaan Sharma, the report said, adding that the Gurugram-based startup has been valued at $1.26 billion in the latest round.

1mg is the 22nd startup to turn unicorn this year among others, including  logistics platform Shiprocket, fintech startup OneCard, sales automation SaaS platform LeadSquared, online beauty products retailer Purplle, edtech platform PhysicsWallah and gaming platfrom Games24x7.

The capital raised will help 1mg fend off competition from other players operating in the online pharmaceuticals space, including Reliance-owned Netmeds and Tiger Global-backed PharmEasy.

PharmEasy, which offers online medicine deliveries and diagnostic test services, is also in talks with multiple investors to raise $200 million in fresh financing but at a valuation that could be 15% or even 25% lower than last year’s $5.1 billion, Reuters reported in June. The company has also deferred its initial public offering (IPO) plan for now.

1mg was hived off from Healthkart as a separate entity in 2015 and later became a part of Tata Digital. It provides services such as e-pharmacy, diagnostics, e-consultation and health content.

Currently, 1mg has a presence in over 1,800 cities in India and claims to have delivered over 31 million orders to date.

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