Mumbai-headquartered online pharmacy startup PharmEasy is set to merge its operations with smaller rival Medlife, a Bengaluru-based omnichannel pharmacy platform, per a report by The Economic Times (ET).
The companies have reportedly entered into a formal agreement to take the transaction forward.
According to the agreement, Medlife is set to sell its 100 per cent equity to API Holdings, the parent company of PharmEasy, in lieu of a 19.59 per cent stake in the merged entity, the report added, citing regulatory filings.
The transaction is currently awaiting the approval of India’s antitrust watchdog Competition Commission of India.
The valuation of the combined entity is pegged at $1.2 billion, stated the ET report.
The development is significant as the e-pharmacy market is becoming the next big arena of battle with corporates and e-commerce biggies increasingly foraying into it.
While Jeff Bezos-led Amazon India launched ‘Amazon Pharmacy’ in Bengaluru last week, Reliance Retail, owned by billionaire Mukesh Ambani, is in the process of scaling up its grocery and pharmacy platform.
Walmart-owned Flipkart, too, is reportedly looking to enter the sector and is in talks with PharmEasy for a potential partnership. This is even as the e-commerce giant is in the process of creating its own team for the e-pharmacy business, a separate report by The Times of India indicated.
The e-pharmacy market in India is currently fragmented. According to experts tracking the sector, it is ripe for consolidation as retailers are vying for the top position.
Medlife made headlines late last year when it raised about $15.5 million by way of issue of non-convertible debentures (NCDs). In May 2019, it had acquired Bengaluru-based medicine delivery startup Myra in an all-stock deal. Prior to that, in January, it had acquired Medlabz, a digital healthcare platform and home diagnostics services company for an undisclosed amount.