[Funding Alert] 1mg turns Unicorn with latest funding of $40 Mn led by TATA Digital

TATA 1 MG

After acquiring a majority stake last year, Tata Digital has injected fresh capital into online drug ordering and pathology platform 1mg. This would be Tata Digital’s first major infusion in 1mg in FY23. The company raised $41 million, at a valuation of $1.25 billion. Tata Digital acquired 1mg in June last year at a valuation of around $450 million.

Tata Digital led the new round of funding with an infusion of INR 254.64 crore, or nearly $32 million, followed by AG subsidiary KWE Beteiligungen and HBM Healthcare Investments, which put in $2.35 million and $2 million, respectively. Another MPOF Mauritius joined the round with $1.5 million and MAF Mauritius with $1.55 million. The remaining amount comes from Rubal Jain and Vardaan Sharma.

1mg board, through a special resolution approved to allot 30,992 shares at an issue price of INR 1,03,047 per share to raise $40 million, regulatory filings with the Registrar of Companies (RoC).

Apart from selling directly to consumers, 1mg is also targeting corporates, insurance OPDs and patient support programs in partnership with pharmaceutical companies. Currently, 1mg claims to deliver 31 million orders per month to over 20,000 PINs in the country.

The proceeds will help 1mg up its game against Reliance-owned Netmeds and Tiger Global-backed PharmEasy, which are going through a rough patch. PharmEasy has already shelved its initial public offering (IPO) plan and is now looking to raise new money at a discount of up to 40% from its peak valuation.

In April 2021, just before the acquisition was announced, Tata Digital placed INR 100 crore of debt in 1mg at a nominal coupon rate. The company was valued $240 million, Entrackr exclusively reported at the time. Earlier media reports estimated that 1mg would be valued at more than $400 million after the deal.

According to Tata Sons’ annual report, Tata Digital spent INR 720 crore to acquire a 62.97% stake in 1mg. The company recently entered into a put option with 1mg co-founders: Prashant Tandon, Vikas Chauhan and Gaurav Agarwal to acquire the remaining 37% stake.

The new infusion came on the back of two-fold growth in 1mg during the fiscal year ending March 2022. 1mg’s operating revenues grew nearly 2x to INR 627 crore in FY22 from INR 309 crore in FY21. Meanwhile, the Gurugram-based company’s losses also rose 68% to INR 526 crore during the same period. Tandon recently said the company wants to turn to profit in the next two years.

The new funding comes as 1mg rival PharmEasy is also seeking to raise a new round after scrapping plans for an initial public offering. Reliance-owned Netmeds is another contender for 1mg besides Apollo. As per last year reports, pharmacies like 1mg and PharmEasy were experimenting with offline stores for omnichannel gaming.

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