Tata Digital, a subsidiary of India’s salt-to-software conglomerate Tata Group, said on Thursday it has acquired a majority stake in online healthcare startup 1mg, a move that will help it grab a bigger pie of the soon-to-be USD 10.5 billion e-healthcare market in the country.
“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,” Tata and 1mg said in a joint statement, without revealing the deal size.
The announcement comes two days after Tata Group invested USD 75 million in Bengaluru-based fitness startup Curefit. Although Tata did not clearly label it as an acquisition, Curefit’s co-founder, Mukesh Bansal has been appointed president of Tata Digital, as part of the deal. Earlier in February, Tata Group bought a 64.3% stake in online grocery major BigBasket for USD 1.2 billion to strengthen its foothold in India’s rapidly growing e-grocery market.
All these moves by the 153-year-old conglomerate are in line with its vision to create a super app that will offer healthcare, food and grocery, fashion, jewelry, consumer electronics, consumer durables, financial services, education, and bill payments.
“E-pharmacy, e-diagnostics, and teleconsultation 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,” they said in a statement. “This category will form a key element of the Tata Digital ecosystem offering,” it added.
With the acquisition of 1mg, Tata will be able to strengthen Tata Health, its in-house online doctor consultation platform. The development comes at a time when the digital healthcare segment has become competitive. Last year, India’s largest company in terms of market cap, Reliance Industries, entered the space by acquiring online pharmacy platform Netmeds.
In May this year, Temasek-backed e-pharmacy startup Pharmeasy acquired smaller rival Medlife for an undisclosed amount. The two companies had been working on the merger since last August to fend off deep-pocketed conglomerates eyeing the domestic health tech market. Reportedly, the valuation of the combined entity is pegged around USD 1.2 billion, which makes it one of the largest players in the segment.
“The investment in 1mg strengthens Tata’s ability to provide superior customer experience and high-quality healthcare products and services in the e-pharmacy and e-diagnostics space through a technology-led platform,” said Tata Digital CEO Pratik Pal.
Set up in 2015 by Prashant Tandon, Vikas Chauhan, and Gaurav Agarwal, 1mg offers medicine delivery, teleconsultation, and diagnostics services. The startup has its own brand of health and wellness products as well.
“We are delighted to join hands with one of India’s most iconic and respected conglomerates,” said Prashant Tandon, co-founder and CEO of 1mg. “This marks a significant milestone in 1mg’s journey to make high-quality healthcare products and services accessible to customers across India.”
The USD 106-billion Tata Group has a diversified business portfolio across sectors such as automotive, airlines, chemicals, defense, FMCG, finance, home appliances, hospitality industry, IT Services, retail, e-commerce, real estate, steel, and telecom. Over the last five years, it quietly rolled out stand-alone apps to purchase groceries, fashion and electronic products, book doctor consultations, and get personal loans. It was only in 2019 that the Mumbai-headquartered company set up Tata Digital as the wholly-owned subsidiary of Tata Sons, the holding company of Tata Group, to streamline its digital initiatives.
When the COVID-19 pandemic hit the country early last year, leading to a steep rise in digital adoption among consumers and businesses, Tata Group sharpened its focus on strengthening its online presence. In August 2020, Natrajan Chandrasekaran, chairman of Tata Sons, in an interview with UK-based Financial Times, revealed the Indian conglomerate’s plan to roll out a super app.
Since then, the company has been out in the market acquiring new-age internet companies that align with its vision of creating an online retail empire. With BigBasket, 1mg, and Curefit under its wings now, Tata Group is quickly becoming a major threat to e-commerce majors like Amazon, Flipkart, and Reliance’s JioMart.