1mg turns unicorn with $40 Mn round led by Tata Digital

After acquiring a majority stake last year, Tata Digital has infused new capital in the online medicine ordering and pathology platform 1mg. This would be the first major infusion by Tata Digital in 1mg in FY23.

The board at 1mg has passed a special resolution to allot 30,992 equity shares at an issue price of Rs 1,03,047 per share to raise Rs 319.4 crore or $40 million, regulatory filings with the Registrar of Companies (RoC) show.

Tata Digital has led the fresh funding round with the infusion of Rs 254.64 crore or close to $32 million followed by AG’s subsidiary KWE Beteiligungen and HBM Healthcare Investments who put in $2.35 million and $2 million respectively. Further MPOF Mauritius joined the round with $1.5 million and MAF Mauritius with $1.55 million. The remaining sum came from Rubal Jain and Vardaan Sharma. 

For the uninitiated, 1mg was hived off from Healthkart in 2015 and became a part of Tata Digital in mid 2021. Apart from selling to consumers directly, 1mg also targets corporates, OPD in insurance and patient support programmes in partnership with pharma companies. At present, 1mg claims to deliver 31 million orders a month across 20,000 pin codes in the country.

The proceeds will help 1mg to ramp up its play against Reliance-owned Netmeds and Tiger Global-backed PharmEasy which has been going through a rough patch. PharmEasy had already deferred its initial public offering (IPO) plan and is now eyeing to raise fresh money with up to 40% haircut from its peak valuation.

In April 2021, just before the announcement of the acquisition, Tata Digital had put in Rs 100 crore debt in 1mg at a nominal coupon rate. The company was valued at Rs 1,770 crore or $240 million, Entrackr had exclusively reported then. Earlier, media reports estimated that 1mg will be valued at over $400 million after the deal.

According to Fintrackr’s estimates, 1mg has been valued at around $1.26 billion after the allotment of the new capital. This would be the third unicorn in Tata Digital’s portfolio after e-grocer BigBasket and fitness company Curefit. It’s worth noting that BigBasket was a unicorn before its acquisition but Curefit made it to the coveted unicorn list after Tata Digital’s investment.

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

The new infusion has come on the back of a two-fold growth in 1mg's scale during the fiscal year ending March 2022. 1mg’s operating revenue soared almost 2X to Rs 627 crore in FY22 from Rs 309 crore in FY21, according to a Fintrackr’s analysis. Meanwhile, losses of the Gurugram-based company also surged 68% to Rs 526 crore during the same period.

Tandon recently said that the company aims to turn profitable in the next two years.

Update: The headline and story have been updated to mention 1mg's latest valuation.