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Online pharmacy startup 1mg raises $40 million

Tata Digital, which had acquired a controlling stake in 1mg in June last year, invested around Rs 254 crore or about $32 million in the current round.

Online pharmacy startup 1mg raises $40 million
FE reported last month that India’s healthtech space, largely dominated by online pharmacy and doctor consultation apps, is headed to a consolidation phase. (Representational image)

Healthtech platform 1mg has raised a fresh funding of $40 million in a round led by Tata Digital. The startup was valued at over $1 billion, according to filings with the Registrar of Companies (RoC).

Tata Digital, which had acquired a controlling stake in 1mg in June last year, invested around Rs 254 crore or about $32 million in the current round. Institutional investors, including KWE Beteiligungen AG and HBM Healthcare Investments, MAF Mauritius, and MPOF Mauritius, participated in the round. It saw contributions from individual investors Rubal Jain and Vardaan Sharma, filings revealed.

The healthtech firm had allotted 30,992 fresh equity shares with a value of Re 1 each at a premium of Rs 1,03,046, which translates into around Rs 319.4 crore. The round augmented 1mg’s valuation to around $1.3 billion, a 2.8X multiple of its previous $450- million valuation in June 2021 when Tata Digital acquired a 63% stake in it.

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Gurugram-based 1mg was founded in 2015 by Prashant Tandon, Gaurav Agarwal and Vikas Chauhan. To date, the startup has raised close to $230 million in funding, including the current round.

1mg’s funding comes at a time when startups in the consumer internet space have struggled to raise any noteworthy capital from VCs or other institutional investors due to a global funding slowdown in tech startups.

FE reported last month that India’s healthtech space, largely dominated by online pharmacy and doctor consultation apps, is headed to a consolidation phase. Smaller startups have entered into strategic M&A deals with established corporates, especially as funding dries up across late-stage rounds.

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In addition, API Holdings, the parent company of online pharmacy PharmEasy, had withdrawn its Rs 6,250-crore initial public offering last month, citing unfavourable market conditions and volatility in stock markets.

However, there is still a large amount of un-invested capital lying across VC and PE funds that are focused on India, and several healthtech investors and investment bankers told FE that they are eyeing deals in emerging healthtech categories. Startups in AI-based diagnostics and patient care, fitness trackers, group insurance and other tech-based allied healthcare services have recently received good investor attention in early- and mid-stage rounds.

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