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E-pharmacy platforms PharmEasy, Medlife seek CCI approval for merger
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Online drug delivery platforms PharmEasy and Medlife have sought the approval of Competition Commission of India (CCI) for a potential merger of their businesses.
The proposed deal comes at a time when the sector is seeing the entry of new players, including ecommerce giant Amazon and oil-to-telecom conglomerate Reliance Industries.
The merger relates to a 100% acquisition of Medlife by API Holdings, the parent entity of PharmEasy. In return, Medlife International will receive 19.59% of ownership in the combined entity, filings with the antitrust body show.
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Founded in 2015 by Dharmil Sheth and Dhaval Shah, PharmEasy connects patients with chemist shops. It also uses a technology-enabled lead-generation platform that helps customers get cheaper diagnostic tests.
The Mumbai-based company’s group firms are involved in wholesale sale and distribution of drugs and pharmaceutical products, medical devices and over-the-counter (OTC) drugs and developing enterprise resource planning (ERP) and software solutions primarily for healthcare businesses and other customised application services for retail pharmacies.
In its last known fundraising, PharmEasy secured $220 million from Temasek Holdings. Its other investors include Fundamentum Advisors, which is backed by Infosys co founder Nandan Nilekani and Helion Ventures co-founder Sanjeev Aggarwal; Eight Roads Ventures India; F-Prime Capital; Avendus Capital; Bessemer Venture Partners and San Francisco-based hedge fund Think Investments.
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Founded in 2014 by Tushar Kumar and Prashant Singh, Bengaluru-based Medlife started with online drug delivery. It later diversified into online doctor consultation and laboratory services.
Kumar and Singh also run Tulip Lab, a company that makes herbal and allopathic medicines. Kumar comes from a family of pharmaceutical entrepreneurs and briefly worked with drug maker Alkem Laboratories, which went public in 2015. Kumar’s family trust also holds over 4% of pharmaceuticals firm Alkem Laboratories.
In August last year, Medlife brought in former chief executive officer (CEO) of Myntra-Jabong Ananth Narayanan as CEO and co-founder.
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Narayanan, who reportedly made an investment in the company in his personal capacity, also joined the Medlife board of directors.
A majority of Medlife’s investments was from Kumar’s investment vehicle Prasid Uno Family Trust. In addition, Medlife raised about $21 million from Hero Fincorp in March this year.
Medlife made two acquisitions last year – In May, it bought online pharmacy app operator Myra Medicines and in January, it acquired digital healthcare platform and home diagnostics services company MedLabz.
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India’s e-pharmacy has lately seen an increase in competition. Besides the proposed PharmEasy-Medlife merger, Reliance Industries Limited (RIL) has announced that it has acquired a majority equity stake in Vitalic Health, which owns and operates online pharmacy player, Netmeds.
Last week, ecommerce marketplace Amazon forayed into the online pharmacy services segment with a soft launch in Bengaluru. Called Amazon Pharmacy, the service will offer delivery of prescription-based and over-the-counter medicines, health devices and Ayurveda medication from certified sellers.
Walmart-owned Flipkart is also exploring acquisitions in this category.
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