Tatas, PE firm Gaja Capital, IFC look to invest in Indian e-pharmacy 1mg

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The Tata group and private equity firm Gaja Capital and World Bank arm International Finance Corp. (IFC) are among those in talks with 1mg to invest a total of at least $100 million in the e-pharmacy firm, two people aware of the discussions said.

IFC is already an existing investor and is considering raising its stake in the company as the e-pharmacy sector is one of the few that has benefited from the covid pandemic, the people said on the condition of anonymity.

“The ideal scenario that 1mg is looking for is a strategic investment by Tata, along with fund infusion by financial investors, which would help it raise $100 million-plus. Currently, Gaja (Capital) and IFC are in talks with the e-pharmacy firm,” one of the two people cited above said, adding that a transaction is likely to happen by December-end.

The potential deal is still being worked out by the parties, but it is expected to exceed the $200 million valuation of 1mg during the $70 million fundraising through IFC, Corisol Holding and a few other venture capital funds in 2019.

The company is in talks for the fundraising with an eye on achieving profitability in about 15 months, and then going for an initial public offering in three to five years, the second person cited above said.

1mg chief executive officer Prashant Tandon declined to comment on the fundraising plans.

The e-pharmacy sector has been one of the biggest beneficiaries of the disruption caused by the pandemic this year as people avoided public places, especially medical facilities, for risk of contracting the virus. For 1mg, its additional businesses of diagnostic collections and telemedicine have boosted the company’s financials.

Since the lockdown started, 1mg saw a 450-500% jump in demand for its services, Tandon said during a webinar hosted by Mint in August.

With business booming, the company also named Mayank Gupta chief financial officer.

With the boost from the pandemic, the e-pharmacy sector has now attracted giants like Amazon and Reliance Industries Ltd. Amazon has already started a pilot project of e-pharmacy in Bengaluru that it eventually plans to expand to other cities, while RIL has gone a step further with its acquisition of another e-pharmacy firm Netmeds through its retail subsidiary for approximately ₹620 crore.

The sector has also seen other forms of consolidation, with two other e-pharmacy firms, Pharmeasy and Medlife, planning to merge. Their merger proposal received approval from the Competition Commission of India in September.

Not wanting to be left behind, salt-to-software conglomerate, the Tata group, is now looking to enter the e-pharmacy space.

A Tata group spokesperson declined to comment on whether it was in talks with 1mg for a stake purchase. Gaja Capital and IFC also did not comment on the discussions.

This article was first published on livemint.com

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.