Tata Digital to Acquire 1mg: A Majority Stake Deal

Tata Digital Acquires Majority Stake in 1mg

Tata Digital, a subsidiary of Tata Sons, announced on Thursday the acquisition of a controlling interest in the digital health startup 1mg. This move represents the latest in a series of strategic investments as the expansive Indian conglomerate expands its presence within the digital consumer market.

Deal Details and Valuation

While the financial specifics of the transaction remain undisclosed, sources familiar with the matter have revealed that 1mg has secured over $220 million in both primary and secondary funding rounds. The company is currently valued at approximately $450 million.

It is understood that Tata Digital has obtained roughly a 55% stake in the Indian startup. This information was provided by an individual with knowledge of the deal, who requested anonymity due to the confidential nature of the agreement.

Representatives for Tata Digital have declined to provide further commentary. A response from 1mg to a request for comment was not immediately available.

Previous Funding and Investors

Prior to Thursday’s announcement, 1mg had already raised $156 million, according to data from Tracxn. The company’s previous valuation stood at $242 million.

Notable investors in 1mg include the Bill & Melinda Gates Foundation, Maverick Ventures, and Sequoia Capital India.

1mg's Market Position

1mg is a leading player in India’s health technology sector, competing directly with PharmEasy, which is backed by Prosus Ventures and currently holds the largest market share.

The company’s operations encompass a network of diagnostic laboratories, a robust supply chain serving over 20,000 postal codes across India, and a significant business-to-business distribution network for pharmaceuticals within the South Asian nation.

Tata Digital’s Digital Ecosystem Strategy

Tata Digital stated that this investment in 1mg aligns with its overarching “vision of creating a digital ecosystem” designed to comprehensively address consumer needs across various categories in a unified manner.

This investment follows recent announcements, including plans to invest in the fitness startup CureFit and the earlier acquisition of a majority stake in the online grocer BigBasket.

Statements from Key Personnel

Prashant Tandon, co-founder and chief executive of 1mg, expressed his enthusiasm, stating, “We are delighted to join hands with one of India’s most iconic and respected conglomerates.” He further noted that this partnership signifies a crucial step in 1mg’s mission to enhance access to high-quality healthcare products and services throughout India.

Tata’s Consumer Reach and Brand Strength

Tata, with its portfolio of consumer brands including Tata Tea, Tetley, Vitax, Eight O’Clock Coffee, Himalayan Natural Mineral Water, Tata Coffee Grand, and Joekels, currently reaches over 200 million households in India.

Analysts at HDFC Bank highlighted Tata’s “unparalleled ability to leverage the Tata brand” in the realm of consumer products, as noted in a report published last month.

This article has been updated to include additional details.