Tata Digital has accelerated the process of acquiring business startups to launch its dreamy project under Super App. In the latest acquisition, Tata Digital has bought the majority stake in online pharma startup 1mg. Tata Group was in touch with 1mg last year to acquire the majority stake. Finally, the deal is closed.
About Tata Digital-1mg Deal
To strengthen its digital consumer space, Tata Digital is on a shopping spree. For the last year, the Tata-1mg deal discussion was going on. Finally, Tata Digital, the subsidiary of Tata Sons, announced on Thursday that it has bought 1mg, the growing online pharmacy startup. Tata Digital wants to establish itself as the major online consumer hub that will include major startups like the Big Basket, CureFit, and 1mg, etc.
Tata Group did not reveal the financial details of the acquisition. But, as per earlier reports, the company had a plan to invest around $110 million in six-year-old 1mg to buy a 65% stake.
Tata Digital and 1mg both declined to comment on the latest deal.
As per Tracxn report, 1mg was valued at $242 million after raising $156 million before the Tata Digital deal. Bill & Melinda Gates Foundation and Sequoia Capital India are the main investors that supported 1mg. But now, Tata Digital has the majority stake.
PharmEasy and 1mg are the two largest online pharmacy firms that are occupying the major shares of the online pharmacy industry.
Other than delivering medicines on 20k+ pin codes, 1mg also operates diagnostic labs located in tier 1 cities. 1mg also distributes medicines and medical equipment to other business firms under its B2B business model.
Why Tata Digital is on Acquisition Spree?
Talking about the investment in 1mg, Tata Digital said:
“Its investment in 1mg is in line with the giant’s “vision of creating a digital ecosystem which addresses the consumer needs across categories in a unified manner.”
Prashant Tandon, co-founder, and chief executive of 1mg are pumped up with a partnership with Tata Group that is the most prestigious Indian business group.
Talking about it further, he said:
“We are delighted to join hands with one of India’s most iconic and respected conglomerates,” said, in a statement. This marks a significant milestone in 1mg’s journey to make high-quality healthcare products and services accessible to customers across India.”
Currently, a business war is on among Tata Group, Reliance Industries, and Amazon to capture the majority of business sectors. To do so, Tata Digital plans to launch Super App that will provide access to all business sectors including grocery, health, fitness, manufacturing, retail, etc.
Tata Group is acquiring the business firms that have established themselves in the business sectors where Tata has no presence. With the help of acquisitions, Tata Digital wants to establish itself in all digital consumer sectors.
Currently, Tata has a huge consumer base of 200 million households due to its consumer brands including Tata Tea, Tetley, Vitax, Eight O’Clock Coffee, Himalayan Natural Mineral Water, Tata Coffee Grand, and Joekels, as per the Analysts report at HDFC Bank in May 2021.
Big Basket, Curefit, 1mg, and Soulfull are the consumer brands the recently acquired by Tata Digital in the last few months. Tata Digital is also in advanced talks to acquire Dunzo, the hyperlocal delivery firm,