On an expansion spree, Tata Digital is set to buy a majority stake in digital health company 1MG. It is the latest in a series of investments that Tata Group has made recently as part of a strategy to build a super app. The move comes weeks after it bought BigBasket and announced an acquisition in CureFit.
“The investment in 1MG strengthens Tata’s ability to provide superior customer experience and high-quality healthcare products and services in e-pharmacy and e-diagnostics space through a technology-led platform,” said Pratik Pal, CEO of Tata Digital.
Prashant Tandon, Co-Founder & CEO, 1MG, said: “We are delighted to join hands with one of India’s most iconic & respected conglomerates. This marks a significant milestone in 1MG’s journey to make high-quality healthcare products & services accessible to customers across India.”
Leading in eHealth space in India
Founded in 2015, 1MG is one of the leading player in the eHealth space and enables easy & affordable access to various products like medicines, health & wellness products, diagnostics services, and teleconsultation to customers.
The company operates three diagnostics labs, has a supply chain covering over 20,000 pin codes across the country, and is also engaged in B2B distribution of medicines and other healthcare products through its subsidiaries.
Tata Digital, in a note, said the investment in 1MG is in line with Tata Group’s vision of creating a digital ecosystem that addresses the consumer needs across categories in a unified manner. E-pharmacy, e-diagnostics, and teleconsultation are critical segments in this ecosystem. They have been among the fastest-growing segments in this space, as this sector enabled access to healthcare through the pandemic.
Tata’s Super-app plans
Tata Group’s ambitions to build a super-app plan recently received an impetus as the competition regulator gave its nod for Tata Digital’s acquisition of BigBasket, India’s leading online grocery platform.
The online pharmacy space has seen a lot of investment and consolidation in India in the last year. API Holdings, which owns PharmEasy, recently became a unicorn and is also planning a public listing. Reliance bought a majority stake in Netmeds. Amazon too forayed into the online pharmacy space in Bengaluru last August, allowing customers to order prescription-based medication in addition to over-the-counter medicines.
Tata Group is building a super app under Tata Digital, with plans to add categories such as groceries, health, education, entertainment, electronics, fashion, travel, beauty and lifestyle. It also plans to leverage the strength of group companies such as Titan, Voltas, Trent, Tata Consumer Products, Tata Motors, Vistara, Tata AIG, Tata Capital and Taj Hotels, offering users an array of services in one app.
In fact, a few months ago, Tata Digital had infused Rs 100 crore worth of debt in 1MG through compulsorily convertible debentures. According to Fintrackr, this investment had valued 1MG at $240 million. Its other investors include Omidyar Network, Sequoia Capital, IFC and Kae Capital, among others. Tandon is expected to stay on and lead 1MG, after the acquisition.