Tata Digital will purchase a majority stake in digital health firm 1MG, the latest in a string of investments by the Tata Group as part of a plan to create a super app. It makes the move just weeks after purchasing BigBasket and announcing a stake in CureFit.
“The investment in 1MG strengthens Tata’s ability to provide superior customer experience and high quality healthcare products & services in e-pharmacy and e-diagnostics space through a technology-led platform,” said Pratik Pal, CEO of Tata Digital in a release.
“We are happy to join up with one of India’s most renowned & renowned conglomerates,” stated Prashant Tandon, Co-Founder & CEO of 1MG. This is a huge step forward in 1MG’s mission to provide high-quality healthcare products and services to customers across India.”
1MG, a player in the eHealth field, was founded in 2015 and provides clients with convenient and affordable access to a wide range of items such as pharmaceuticals, health and wellness items, diagnostics services, and teleconsultation.
The company has three diagnostic labs, has a supply network that reaches over 20,000 pin codes across the country, and engages in B2B distribution of medications and other healthcare products through its subsidiaries.
The investment in 1MG, according to Tata Digital, is in keeping with the Tata Group’s aim of developing a digital ecosystem that answers customer requirements across categories in a unified manner. E-pharmacy, e-diagnostics, and teleconsultation are essential components of this ecosystem, and they have been among the fastest-growing segments in this market as the epidemic facilitated access to healthcare.
Tata Digital said earlier this week that it will invest up to $75 million in healthtech firm CureFit, pending the conclusion of the diligence process and other clearances. Mukesh Bansal, the founder and CEO of CureFit, will join Tata Digital as President, Tata Digital, and will continue to head CureFit.
The competition regulator recently gave its blessing to Tata Digital’s acquisition of BigBasket, one of India’s top online grocery platforms, boosting the company’s super-app ambitions.
In the previous year, the fast-growing online pharmacy market has witnessed a lot of investment and consolidation. Reliance took a majority share in Netmeds, while API Holdings, which controls PharmEasy, recently became a unicorn and is considering a public listing. Last August, Amazon launched an online pharmacy in Bengaluru, allowing users to acquire prescription-based medications as well as over-the-counter medications.
The Tata Group has big plans for the e-commerce market, which is now dominated by Amazon and Walmart’s Flipkart, with Reliance Industries’ JioMart also developing quickly.
Traditionally, Indian corporate houses have avoided investing in or taking risky bets on high-loss-making, valuation-driven industries. As a result, for the majority of their funding, startups have had to rely on international investors and funds. According to analysts, the Tatas’ move could create a precedent for Indian corporations to invest in new-age business methods.
It’s working on a super app under the Tata Digital banner, with aspirations to include groceries, health, education, entertainment, electronics, fashion, travel, beauty, and lifestyle. It also intends to combine the strengths of group companies Titan, Voltas, Trent, Tata Consumer Products, Tata Motors, Vistara, Tata AIG, Tata Capital, and Taj Hotels to provide consumers with a variety of services in one app.
Tata Digital, in fact, injected Rs 100 crore in debt into 1MG through compulsorily convertible debentures a few months back. According to Fintrackr, this investment was worth $240 million to 1MG. Omidyar Network, Sequoia Capital, IFC, and Kae Capital are among its other investors. After the acquisition, Tandon is likely to continue on and lead 1MG.
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Smrutirekha Bhoi