Tata Digital on Thursday announced that it will acquire a majority stake in digital health company 1mg stating that it is “in line with the Tata group’s vision of creating a digital ecosystem that addresses consumer needs across categories in a unified manner.” The company did not reveal the size of the deal but Entrackr cited sources as saying that that 1MG will be valued at over $400 million and founders of 1mg will continue.
1mg started off as an online pharmacy and has since expanded into insurance, patient support program, diagnostics services, doctor discovery, and teleconsultation to customers. The company operates three diagnostics labs and is also engaged in the business to business (B2B) distribution of medicines and other healthcare products. Founded in 2015, it has raised over $200 million across several rounds from Corisol Holding, IFC, Redwood Global and Korea Omega Healthcare Fund, Sequoia, Maverick Ventures, Omidyar and Kae Capital among others.
“E-pharmacy, e-diagnostics, and teleconsultation 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. The overall market is around $1bn and expected to grow at ~50% CAGR driven by increased health awareness among consumers and greater convenience.” – Tata Digital press release
Tata Digital on a spending spree
Tata Digital, which is a 100% subsidiary of Tata Sons, is focused on building digital businesses for the Tata conglomerate, for which it has reportedly been allocated ₹12,000 crores. Earlier in April, the company infused ₹100 crore debt funds in 1mg and indicated that it will pick a 50% stake. The two companies have been in talks since November. 1MG’s rival in e-pharmacy space, Netmeds, was acquired by Reliance in August last year.
“We are delighted to join hands with one of India’s most iconic and respected conglomerates. This marks a significant milestone in 1MG’s journey to make high-quality healthcare products and services accessible to customers across India.” — Prashant Tandon, Co-Founder & CEO, 1MG
Tata’s 1MG announcement comes a few days after it announced that it will invest up to US$75 million (₹546 crores) in CureFit, another health tech company that offers digital and offline experience in fitness, nutrition, health diagnostics, consultations, and mental well-being. Tata Digital also received government approval for acquiring a majority stake in online grocery startup BigBasket in April. Tata might add to this growing list with an investment in hyperlocal delivery platform Dunzo, according to reports that emerged on Wednesday.
Super app plan on track
With the investments in BigBasket, CureFit, 1MG, and interest in Dunzo, Tata Digital is well on track to launch its “super app.” The company first indicated its plan to launch a “super app” August 2020 and said that the app will offer users a range of services offered by the Tata Group, including food and grocery ordering, fashion and lifestyle, consumer electronics and consumer durables, insurance and financial services, education, healthcare and bill payments.
“Each of our brands service 10-12-15-20 million customers. We are trying to give consumers the products and services they need. Not necessarily only the Tata brands, but more. It is an open architecture. We will have a strong loyalty programme, payments engine, financial products and other categories,” N Chandrasekaran, chairman of Tata Group, told BusinessToday.
Tata has not yet provided a launch date for the app, but when it launches, it will face tough competition from Amazon, Flipkart, Jio, Paytm, and PhonePe’s upcoming super app.