Tata Digital Ltd said Thursday it is buying a majority stake in online pharmacy 1mg, in its third major bet on an Indian technology startup this year as it builds its digital businesses.
The deal comes just days after the unit of diversified conglomerate Tata Group decided to invest $75 million (Rs 546 crore) in fitness startup CureFit Healthcare Pvt. Ltd and months after it took control of online grocer BigBasket.
The three deals are part of Tata Group’s ambitions to grow its digital services businesses as it seeks to stave off challenges by billionaire Mukesh Ambani’s Reliance Industries, Walmart-owned Flipkart and Amazon.com Inc. Reliance last year acquired 1mg rival Netmeds. The four groups also compete in the online grocery delivery segment, as also in several other retail categories.
“The investment in 1mg is in line with Tata Group’s vision of creating a digital ecosystem which addresses the consumer needs across categories in a unified manner,” Tata Digital said in a statement.
“E-pharmacy, e-diagnostics and tele-consultation are critical segments in this ecosystem and have been among the fastest growing segments in this space, as this sector enabled access to healthcare through the pandemic,” it added.
The Tata Group didn’t disclose any financial details of the 1mg deal. It also didn’t specify whether it is injecting fresh capital into 1mg or buying out existing shareholders.
1mg was started by Prashant Tandon, Gaurav Agarwal and Vikas Chauhan six years ago. Over the years it has raised around $200 million in funding, according to Crunchbase. Its investors include Bill & Melinda Gates Foundation, Sequoia Capital, Swiss family office Corisol, Swiss investment firm HBM Healthcare and International Finance Corporation.
Apart from Netmeds, 1mg also competes with Pharmeasy. API Holdings Pvt. Ltd, the parent of Pharmeasy, raised $350 million in April to become a technology unicorn with a valuation of more than $1 billion.
Pharmeasy’s backers include South African tech investor Prosus Ventures, US-based private equity firm TPG Growth, Singapore state investment firm Temasek and Canadian pension fund CDPQ.