Tata 1mg Technologies Pvt. Ltd, which runs online pharmacy 1mg, has raised $40 million in a funding round led by its majority shareholder Tata Digital Limited at a unicorn valuation.
KWE Beteiligungen AG, HBM Healthcare Investments, MPOF Mauritius, MAF Mauritius, Rubal Jain and Vardaan also invested in the Tata Group company.
Tata Digital Limited invested about $32 million while KWE Beteiligungen and HBM Healthcare Invested close to $2.35 million and $2 million, respectively, in the online pharmacy, according to the corporate ministry filings.
A person familiar with the deal said that1MG is now valued at an estimated value of approximately $1.25 billion.
Tata Digital declined to comment.
Founded in 2011 by Prashant Tandon, Gaurav Agarwal and Vikas Chauhan, 1mg sells medicine and other pharmacy products via its online platform. The company also provides diagnostics services to customers.
In June last year, Tata Digital, a 100% subsidiary of Tata Group holding entity Tata Sons, acquired a majority stake in 1mg. Initially, Tata Digital acquired a 58.7% stake in the company in June 2021 and later increased it to about 63% by December 2021.
Tata Digital had acquired 1mg for a cash consideration of Rs 720 crore, Tata Sons revealed in its annual report for financial year 2022 (FY22).
Prior to the acquisition, 1mg raised close to $13.3 million from Tata Digital in April 2021. Previously, the startup bagged about $10 million in February 2020 from Bill and Melinda Gates Foundation. In total, the online pharmacy has raised close to $230 million across several debt and equity rounds.
In the financial year 2022 (FY22), 1mg’s operating revenue more than doubled to Rs 627 crore from Rs 309 crore in FY21. On the other hand, the company’s losses soared to Rs 526 crore in FY22 from Rs 314 crore in the previous year.
According to a 2022 KPMG-FICCI report, India's e-pharmacy business is expected to grow at an annual rate of 40-45% as a result of the country's expanding internet and mobile phone markets and government-sponsored programmes.
In the online pharmacy space, Tata 1mg pits against Pharmeasy and Reliance-owned Netmeds, Apollo Pharmacy, Flipkart-owned Sasta Sundar (Flipkart Health+) and Amazon, among others.
Last month, PharmEasy’s parent company, API Holdings Ltd, called off its initial public offering (IPO), citing market conditions and strategic considerations. The e-pharmacy is instead planning to raise funds from existing shareholders via a rights issue.