Tata 1mg in Talks to Raise $200 Mn Amid Valuation Standoffs

While Tata 1mg is seen as one of the best-performing businesses in the Tata Digital portfolio, potential investors are not aligned with the $1.25 billion post-money valuation from 2022, suggesting a range of $750-800 million instead.

Tata 1mg, the online pharmacy arm of Tata Digital, is looking to raise $200 million in a fresh funding round, attracting interest from Novo Holdings, Canadian pension fund CPPIB, Permira, and Chrys Capital, according to sources familiar with the matter.

The fundraising is part of a larger capital raise across Tata Digital units, including BigBasket.

While Tata 1mg is seen as one of the best-performing businesses in the Tata Digital portfolio, potential investors are not aligned with the $1.25 billion post-money valuation from 2022, suggesting a range of $750-800 million instead.

Reportedly, some investors are seeking board seats and other rights, which Tata is unwilling to grant. The company is said to need $125 million of fresh capital.

Earlier interested investors such as GIC of Singapore and Warburg Pincus are no longer in consideration. Tata Digital owns about 63% of Tata 1mg, with other investors including Sequoia Capital, Intel Capital, Omidyar Network, and the Bill & Melinda Gates Foundation.

The platform, valued at $1.25 billion during its 2022 funding round, also offers diagnostics and healthcare services, and plans to invest in expanding its physical presence and quick delivery capabilities.

The company’s consolidated revenue rose 22% to Rs 2,392 crore in FY25 from Rs 1,968 crore in FY24, split across Tata 1mg Technologies (Rs 2,016.5 crore) and Tata 1mg Healthcare Solutions (Rs 375.5 crore). Consolidated losses narrowed to Rs 276 crore in FY25 from Rs 313 crore in FY24, while on a unit basis, it spent Rs 1.12 to earn a rupee of operating revenue.

Tata 1mg, acquired by Tata in June 2021, delivers orders in four to five hours in select locations, including Delhi-NCR, and offers a 30-minute express delivery for certain products. The company operates over 100 brick-and-mortar medical stores combining pharmacy and diagnostics and aims to open 3,000 outlets by FY30.

Online pharmacies account for only 3-5% of the Indian market, compared to nearly a fifth in developed economies, highlighting significant growth potential.

Tata 1mg has scaled beyond online operations into offline retail and integrated healthcare services, offering e-pharmacy, diagnostics, consultations, and institutional health solutions. The platform lists over 800,000 stock-keeping units and delivers to more than 20,000 pin codes.

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