Medlife is looking at a 20-30% stake in the new entity that will be formed.

Strips of different types of tablets
Money E-pharma Tuesday, July 21, 2020 - 20:36

Online health companies Medlife and Pharmeasy are in talks to merge, and the deal is likely to be valued at $200-$250 million, according to sources. The modalities of the same are being worked out, and Medlife is looking at a 20-30% stake in the new entity that will be formed.

Both companies are prominent players in the online healthcare segment. Founded in 2014 by Tushar Kumar and Prashant Singh, Benglauru-based Medlife provides medicines, health products, doctor consultations and tests through both its website and its app. In 2019, Medlife raised Rs 110 crore debt financing from Wilson Global Opportunities Fund. In April 2019, Medlife got Rs 118 crore in an equity funding round from Founder Tushar Kumar’s family trust, Prasid Uno Family Trust. Medlife earlier acquired medicine delivery startup Myra and diagnostics company Medlabz.

Founded in 2015 by Dharmil Sheth, Dhaval Shah and Mikhil Innani, Mumbai-based Pharmeasy has had seven funding rounds so far, with the latest being their Series D funding round of $220 million led by Temasek. Pharmeasy’s investors include Eight Roads Ventures, Bessemer Venture Partners, Nandan Nilekani-backed Fundamentum and LGT. So far, Pharmeasy has raised $328.5 million. Pharmeasy offers medicines, healthcare products as well as diagnostic tests. 

According to 2019 report by Frost and Sullivan, Medlife led the market with a 30% market share of the total e-pharmacy market in India.

Moneycontrol reported that consolidation has been expected in this sector into one or two big players because medicine has low margins and the ancillary services have not taken off. The report adds that the ancillary services do not contribute more than 10-15% of revenue of companies such as Pharmeasy, 1mg, Netmeds and Medlife.

According to the Times of India, Reliance Industries in May was in talks to acquire a majority stake in Chennai-based Netmeds. As per the reports, Reliance may invest $130-$150 million through one of its subsidiaries, which may also include a fresh infusion.

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