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Watch: Dhruv Kapoor of Sistema Asia Capital on the Netmeds exit

31 Aug, 2020

The e-pharmacy sector in India has turned into a high stakes game with the recent Netmeds acquisition by Reliance Industries Limited, the potential merger of PharmEasy and Medlife, as well as the entry of Seattle based ecommerce giant Amazon

Read: Will Amazon, RIL edge out venture capital-backed startups from the e-pharmacy game?

While the consolidation in the sector starts to play out, early backers of e-pharmacy startups stand to book profitable exits, even as the sector continues to grapple with regulatory ambiguities. 

The Netmeds acquisition created an exit for Sistema Asia Capital, which entered the Chennai based company about four years ago. The growth-to-mid-stage focused venture capital firm, which is backed by Russian conglomerate Sistema PJSFC, wrote its first cheque to Netmeds in 2017 when it participated in a $14 million funding round. It invested again in 2018 as part of a $35 million funding round. 

The firm has not disclosed the details of its return from the exit, following the acquisition.

In an interview with TechCircle, Dhruv Kapoor, partner at Sistema Asia Capital (India), spoke about the factors that drove its investment in Netmeds, consolidation in the e-pharmacy sector and why an exit at this juncture made sense. 

Netmeds marks Sistema’s second profitable exit in India from the $120 million Sistema Asia Fund, which started investing here about four years ago. Earlier, it exited gift cards solutions provider QwikCilver. It has backed a total of 10-odd companies here across sectors such as food-tech, health-tech, fintech and SaaS.