PharmEasy has acquired Medlife for an undisclosed amount, the e-pharmacy unicorn said on Tuesday. The deal will make PharmEasy the largest player in the domestic online pharmacy sector, with the combined entity set to serve 2 million customers a month.
“We started in 2015 with the purpose of making affordable health care accessible to all; PharmEasy now covers every single pin code. With this, we aim to reach even more people across India. This makes us the largest health care delivery platform in the country by a distance — serving more than 2 million families a month,” wrote Dhaval Shah, co-founder of PharmEasy, on Linkedin.
The deal values the stake of Medlife shareholders at $250 million, said a person close to the development.
This acquisition spells the end of Medlife as a brand. “While we love the Medlife brand — we believe a singular focus on consumer needs, through a single platform ‘Pharmeasy’, will help cater to them much better. Medlife customers just need to login to the PharmEasy app to start using their Medlife account via the same mobile number. All digitised prescriptions and saved addresses dating back to a year will be available,” he added. Besides users, PharmEasy will also onboard Medlife’s retail partners.
According to a Competition Commission of India filing, the proposed combination relates to the acquisition of 100 per cent equity shares of Medlife by API Holdings, the parent of PharmEasy, in return for 19.59 per cent equity share capital.
“As e-pharmacy matures, smaller players are merging into larger players. PharmEasy and Medlife together hold 60-70% market share. This is great for consumers as better economics is passed on, and great for the businesses as they become more profitable,” said Rehan Yar Khan, managing partner, Orios Ventures Partners, which is also an investor in PharmEasy.
“This acquisition strengthens our position in the health care industry, and helps provide quality health care to more Indian households,” added Shah.
Last month, PharmEasy became the country’s first e-pharmacy to enter the unicorn club after raising a $323-million round from API Holdings, Prosus Ventures, and TPG Growth, at a valuation of $1.5 billion.
The Indian e-health sector, expected to become a $16-billion opportunity by FY25 (growing from $1.2 billion), has seen a lot of action lately with bigwigs such as the Tatas, Amazon, and Reliance making inroads.
It is expected to touch 57 million households, driven by positive reception from both consumers and providers, along with supportive government regulations and investments, according to Redseer.
According to reports, while the Tata Group has signed a definitive agreement with 1mg to buy nearly 65 per cent in the start-up, RIL has acquired 60 per cent stake in Netmeds for Rs 620 crore. Amazon, too, had entered the online medicine segment and launched Amazon Pharmacy.
The pandemic has changed the fortunes of e-pharma players, with people switching to online purchase of general medicines and medical devices such as thermometers, oximeters, and health supplements. Reports say top online pharmacy providers have seen an up to 60 per cent rise in sales during the second wave.