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Medlife raises $15 mn debt; FY19 revenues up 164% to Rs 363 crore
![Medlife raises $15 mn debt; FY19 revenues up 164% to Rs 363 crore](https://assets.techcircle.in/uploads/article-image/2019/12/images/20997-18330-prashant-singh-and-tushar-kumar.jpg)
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Bengaluru-based Medlife International, which operates an online pharmacy, has raised $15 million via non-convertible debentures from Mauritius-based Wilson Global Opportunities Fund.
The company will use the capital for its working capital requirements, repaying existing loans and business development, according to its latest regulatory filings. It will pay an interest of 14% a year and repay the entire debt in 48 months over four equal installments. The company has also created a security interest on its current and moveable assets and on those of Medlife Wellness Retail.
In April 2019, founder Tushar Kumar’s investment vehicle Prasid Uno Family Trust had infused $17 million in the company. Kumar’s family trust also holds over 4% of pharmaceuticals firm Alkem Laboratories.
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The latest fundraising comes two days after Medlife International reported widened losses for the financial year ended March 31, 2019, as the company saw expenses jump in its bid to fuel growth.
In FY19, the company’s net losses widened to Rs 403 crore from Rs 164 crore in the previous year on revenues of Rs 363 crore, up 164%, separate filings showed. The significant topline growth came entirely from the mainstay online pharmacy business, while online doctor consultation and testing operations added Rs 11 crore to the revenues.
However, actual revenues were lower by one-third of its estimated revenue run rate of Rs 1,000 crore.
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Total expenses swelled 2.6 times to Rs 768 crore led by an over two-fold increase in input costs, which consisted of medicines.
Employee costs too doubled to Rs 107 crore as the company paid higher salaries. Rental costs rose over three times to Rs 10 crore, which is likely to continue since the company plans to increase its presence in offline retail stores. The company plans to launch 750 retail pharmacies over the next two years, Business Standard had reported earlier. Notably, Medlife’s spends on advertising shot up 3X to Rs 127 crore. It also offered higher discounts to customers, as the associated costs grew to Rs 54 crore.
Founded in 2014 by Tushar Kumar and Prashant Singh, Medlife operates a digital medicine delivery service through an inventory-led model. It’s operations consist of 40 fulfilment centers and three regional hubs spread over 22 cities. As of September, the company claimed services across 29 states, 4,000 cities and 25,000 pin codes with 25,000 deliveries a day.
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While Medlife started as an online pharmacy, it later expanded into the health testing and online consultation businesses. It competes with other online pharmacies such as PharmEasy and 1mg. In May, Medlife acquired e-pharmacy Myra Medicines for an undisclosed sum.
In June, Gurugram-based 1mg raised $70 million in a funding round led by Swiss family office Corisol Holding Ag and International Finance Corporation along with a consortium of South Korean venture capital firms.