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It's Amazon vs Reliance Inds, As Latter Acquires E-pharmacy Startup Netmeds The investment of INR 620 crore will give Reliance Industries 60 per cent holding in the equity share capital of Vitalic and 100 per cent direct equity ownership of its subsidiaries

By Debarghya Sil

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Mukesh Ambani

Almost a month after its annual general meeting wherein Reliance Industries Limited's (RIL) chairman Mukesh Ambani announced his intentions to tap into various market spaces including pharmaceutical and healthcare, RIL's subsidiary Reliance Retail Ventures Limited (RRVL) on Tuesday acquired a majority equity stake in Chennai-based Vitalic Health Pvt. Ltd and its subsidiaries for approximately INR 620 crore.

This investment will give Reliance 60 per cent holding in the equity share capital of Vitalic and 100 per cent direct equity ownership of its subsidiaries Tresara Health Pvt Limited, Netmeds Market Place Limited and Dadha Pharma Distribution Pvt Limited.

The move also comes days after e-commerce giant Amazon launched its online drug sales "Amazon Pharmacy' in Bengaluru and will expand in other parts of the country.

According to reports, RIL is also in talks for deals with other startups such as Milkbasket and Urban Ladder.

Vitalic and its subsidiaries, collectively known as Netmeds, were incorporated in 2015 by Pradeep Dadha. Netmeds currently delivers personal and baby care products. The online platform also provides doctor appointments. According to a report, Netmeds was looking for buyers for over a year as it was unable to raise new rounds of funds.

Speaking on this strategic investment, Isha Ambani, director, RRVL, said, "This investment is aligned with our commitment to provide digital access for everyone in India. The addition of Netmeds enhances Reliance Retail's ability to provide good quality and affordable health care products and services,and also broadens its digital commerce proposition to include most daily essential needs of consumers. We are impressed by Netmeds' journey to build a nationwide digital franchise in such a short time and are confident of accelerating it with our investment and partnership."

On the recent development, Pradeep Dadha, founder and chief executive officer, Netmeds, said, "It is indeed a proud moment for "Netmeds"to join Reliance family and work together to make quality healthcare affordable and accessible to every Indian. With the combined strength of the group's digital, retail and tech platforms, we will strive to create more value for everyone in the ecosystem, while providing a superior Omni Channel experience to consumers."

Betting on E-pharmacies

Medicine delivery startups over the years have grappled to stay afloat. However, the sector has become a big bet for investors because of the COVID-19 pandemic. During the lockdown, many startups witnessed a significant rise in their sales and onboarded many first time customers. According to a report released by the Federation of Indian Chambers of Commerce & Industry (FICCI), the lockdown has resulted in 2.5 times growth in the number of households using e-pharmacy services. The paper estimated the e-pharmacy penetration to be 1.4 times of its pre-COVID household levels which will be 70 million households in the next four years.

According to a report by consultancy firm EY, addressable medicine market for e-pharmacies in India is expected to reach $18.3 billion by 2023.

This acquisition brings Mukesh Ambani one more step closer to his dream of full-fledged e-commerce platform. Reliance's JioMart, an online grocery delivery service, has already registered 400,000 orders on a daily basis and plans to expand in other cities with further tie-ups with grocery stores. Its app on android has already crossed 10 million downloads and will soon become the largest e-grocer by beating BigBasket's daily order volumes.

Debarghya Sil

Entrepreneur Staff

Former Correspondent

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