As of FY23 the Central and State Governments’ budgeted expenditure on the health sector reached 2.1 per cent of India’s GDP. Previously, it had a 2.2 per cent in FY22 and 1.6 per cent in FY21. Owing to this, the country sees close to 10,000 health tech startups including unicorns like Cult.fit and Tata 1MG. According to a report by RBSA, the Indian health tech industry is expected to reach $50 billion by 2033.
Although Anubhav Bansal and Dr Mohit Agarwal saw a growing opportunity in the market, they also simultaneously noticed the lack of online presence and unavailability of AYUSH medicines. The duo started Healthmug in 2015 to make AYUSH medicines available online the same way western medicines are. AYUSH- Ayurveda, Yoga and Naturopathy, Unani, Siddha, and Homeopathy- medical systems that are practiced in India.
The Delhi-based company features products of over 1,000 brands and has around 2 lakh SKUs on its website. With an aim of connecting customers to brands and doctors, the company has partnered with over 5,000 doctors to provide free consultation services to users who conduct purchases from the site. It is currently onboarding close to 800 doctors every month and plans to increase this to 1,000 doctors per month.
What is Healthmug’s business model?
We get commission from the brands we have onboarded based on the sales on our website. We have more than 1,000 brands who are directly working with us, these are a mix of wholesalers and retailers who sell on our website.
Why has the company focused on onboarding doctors to the platform?
We realized that most ayurvedic doctors don’t prescribe medicines that are readily available in the market, instead they create and prescribe their own formulations. Understanding this, we wanted to create a relationship between doctors and brands as well. We give discounts to doctors who purchase from us in bulk.
This also builds a complete solution for customers who have a specific problem. They can consult a doctor for free and then move onto the website to purchase the medicines prescribed to them.
How has the company grown so far?
Healthmug currently has a user base of 30 lakh customers and out of which 10 lakh are active users. Most of this traction is seen from 4 main cities- Delhi, Mumbai, Bangalore, and Kolkata. Apart from this, we see around 20-30% of our orders coming in from tier 1 cities, around 40% from tier 2 cities, and the rest 30-40% orders are seen from tier 3 cities and rural areas. We see a higher number of orders coming in from tier 2 cities mostly because of the larger number of cities in that category.
Last financial year, we had a revenue of around Rs 35 crores and our current run rate is Rs 3 crores. We have seen a 25% year-on-year growth for the past two years. Healthmug’s current valuation stands at Rs 500 crores.
What are the future plans of the company?
Apart from the plans of deepening our hold in the Indian market, which is a wide enough market in itself, we are looking at expanding the company to the Asia pacific and Middle East and North Africa regions.
We are also on the lookout to raise our maiden round and are currently in talk with a few players in the market. We waited to raise our first round of funding because we wanted to make sure to create an entire ecosystem and use the funding amount to scale it up. We are looking to close the round in the next few months.