1mg joins unicorn club with $40 million funding led by Tata Digital

unicorn

Tata-owned online healthtech platform 1mg has joined the coveted unicorn club with fresh funding of about $40 million in a round led by Tata Digital, which valued the startup at between $1.25 and $1.30 billion.

Unicorns are startups with a valuation of $1 billion or more.

Tata 1mg's board passed a special resolution to allot 30,992 equity shares having a face value of Re 1 each at a premium of Rs 1,03,046, according to the company said in a filing to the ministry of corporate affairs (MCA). The company thus raised about Rs 319.36 crore or about $40 million.

The premium was over 5x of 1mg's previous fundraise, which had valued the startup at $240 million, according to a Moneycontrol estimate. The latest round has valued Tata 1mg between $1.25-$1.30 billion.

Tata Digital led the round and invested close to Rs 254 crore or about $32 million followed by  KWE Beteiligungen AG, HBM Healthcare Investments, MAF Mauritius, MPOF Mauritius and individual investors Rubal Jain and Vardaan Sharma, the MCA filings showed.

Questions sent to Tata Digital and Tata 1mg's founder Prashant Tandon remained unanswered.

Tata 1mg's latest fundraise comes at a time when healthtech companies have struggled as an ebbing coronavirus pandemic has seen the demand for online services drop with the easing of restrictions.

Moneycontrol has written how teleconsulting platforms, e-pharmacies and at-home diagnostics were hit by tepid demand with the pandemic-induced boost wearing off.

Healthtech firm Mfine, which counts global venture capital firms like Beenext and Prime Venture Partners among its backers, laid off close to 400 employees in May before merging with Chennai-based LifeCell International's diagnostics business to focus on more profitable areas.

In August, Tiger Global-backed healthtech platform Pharmeasy withdrew its initial public offering draft papers citing market conditions. The company is now looking to raise funds, reportedly at a lower valuation.

Tata 1mg, previously knowns as 1mg, was hived off from healthtech platform Healthkart in 2015 as a separate online pharmacy entity. Under Healthkart, the online pharmacy vertical was called HealthkartPlus. After spinning it off as 1mg under 1mg Technologies, the company raised $6 million from a bunch of investors.

In 2021, 1mg was acquired by Tata and as per media reports, Tata Digital spent over Rs 700 crore to buy about 63 percent stake in the startup that was rebranded as Tata 1mg.

The company clocked a revenue of Rs 316 crore in FY21 (2020-21), which was the first year of the pandemic against Rs 369 crore in FY20 (2019-20).  The company's losses have remained almost changed at Rs 314 crore in FY21 against Rs 318 crore in FY20, according to its regulatory filings.