Update: On April 2, 2021, ET reported that DigiHealth Technologies, a wholly-owned subsidiary of ABCD Technologies, is acquiring 91.8% of Pharmarack for Rs 111 crore, and the deal is expected to be completed in 30 days, regulatory filings showed.
Some of India’s top pharmaceutical companies, namely Sun Pharma, Cadila Healthcare, Lupin and Torrent Pharma, are reportedly in advanced negotiations to acquire business-to-business (B2B) healthcare platform Pharmarack.
Each of the four companies has invested INR 40 Cr to purchase 20% equity in a newly formed company named ABCD Technologies, aiming to facilitate efficient goods distribution and digitising healthcare, according to the ET report. This new entity, which will be renamed as IndoHealth Services, will acquire the Pune-based Pharmarack.
The new digital platform is said to have brought onboard 3,000-4,000 distributors and will provide the technological backbone to companies looking to build their own online B2B marketplace which can eventually scale to an online pharmacy. A source told the publication that the four pharma majors are acquiring Pharmarack to ensure that they remain competitive against Reliance and Amazon, which have also entered the online pharmacy space.
While Reliance sells medicines online through its ecommerce platform JioMart launched last year, Amazon launched its online pharmacy service Amazon Pharmacy in Bengaluru in August last year, with plans to scale up the service to more cities in the near future.
Founded in 2015 by Amit Backliwal, Bhavik Parmar and Pradyumn Singh, Pharmarack has, to date, raised $3.7 Mn in two funding rounds from four investors. It last raised funds in 2019, worth $3 Mn for its Series A round led by IvyCap Ventures. It also counts Unicorn India Ventures and Patni Group’s Currae Healthtech Fund as its early backers.
According to an Inc42 Plus report titled, India’s Healthtech Landscape In A Post-Covid-19 World, the Indian healthtech market is projected to reach a market size of $21.3 Bn by 2025, from $5.2 Bn in 2019. The market is expected to grow at a CAGR (compound annual growth rate) of 27% between 2020-25 and will acquire 3.2% of the global healthtech market pie by the end of the period.
Within healthtech, online pharmacies have proven to be the most attractive bet for investors, having attracted funds worth $462 Mn between 2014-19, the most among the various sub-segments for India’s healthtech startups such as telemedicine and fitness and wellbeing, among others.
Update – 12:20 pm, April 3, 2021: Story updated with confirmation of the acquisition.