After BigBasket and Curefit, Tatas seal deal to buy majority stake in 1mg

Tata Digital, a 100% subsidiary of Tata Group holding entity Tata Sons, has acquired a majority stake in e-pharmacy and health technology platform 1mg as it builds out a unified consumer ecommerce platform.  

The financial details of the deal were not disclosed. 

The announcement comes weeks after the automotive-to-technology services conglomerate picked up majority ownership in online grocery platform BigBasket and invested in health and fitness startup Cure Fit Healthcare. 

The three deals are expected to serve as a launchpad for Tata’s digital ambitions.  

“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. 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,” Tata Digital said in a statement.  

Digital healthcare, a $1 billion opportunity at present, will form a key element of the Tata Digital ecosystem offering.  

“The investment in 1MG strengthens Tata’s ability to provide superior customer experience and high-quality healthcare products and services in e-pharmacy and e-diagnostics space through a technology led platform,” Pratik Pal, CEO of Tata Digital, said.  

Tata Digital had made an investment commitment of nearly Rs 100 crore into the company in April. 

Founded in 2011 by Prashant Tandon, Gaurav Agarwal and Vikas Chauhan, 1mg clocked a total revenue of Rs 369.3 crore in financial year 2019-20 (FY20). The total loss for the period stood at Rs 317.8 crore. The company’s expenses rose to Rs 687.2 crore for the period.  

With the combined entity of Pharmeasy and Medlife valued at over $1.2 billion, the epharmacy space is seeing increased competition and consolidation. Pharmeasy has since closed a large growth round worth $350 million led by Prosus Ventures and TPG Growth. In a move to build ecommerce play, Reliance Industries had also acquired epharmacy player Netmeds in August 2020. Meanwhile, ecommerce marketplace Amazon has also ventured into the online pharmacy services segment, with a soft launch in Bengaluru. 

The Tata Group is building a digital consumer ecosystem addressing consumer needs across categories in a unified manner. 

In May, it acquired a majority stake in BigBasket and committed an investment of Rs 1,591 crore, of which the e-grocery company had already received Rs 1,116 crore. This is possibly the first tranche of the overall investment planned by the Tata Group firm to acquire the majority stake. 

On Monday, Tata Digital announced it entered into an agreement to invest up to $75 million (Rs 545 crore) in CureFit Healthcare.  As part of the transaction, Mukesh Bansal, co-founder and CEO of CureFit will join Tata Digital in an executive role as president while continuing in his leadership role at the health-tech firm. 

On Tuesday, VCCircle reported that the Tata Digital is in talks to pick up a nearly controlling stake in diversified hyperlocal delivery platform Dunzo Digital, which counts the likes of Google and Lightbox among its investors. 

These acquisitions are expected to strengthen Tata’s proposed ecommerce play across retail, grocery, epharmacy and other sectors. It will also help the diversfied Tata Group take on established heavyweights such as Amazon, Reliance Industries and Walmart-owned Flipkart in India's booming ecommerce market.