Reliance unit acquires India's Netmeds

RRVL, a subsidiary of oil-to-telecom conglomerate Reliance Industries, will acquire a 60% stake in Vitalic Health, the parent of Netmeds for INR6.2 billion ($83 million), according to a filing. This will give RRVL full equity control of Netmeds.

The transaction will facilitate an exit for Netmeds backers Sistema Asia Fund, Daunh Penh Cambodia Group, and Cambodia's Tanncam Investment. The online pharmacy raised $45 million in a Series C round from these investors in 2018. 

Founded in 2015, Netmeds describes itself as the first player to offer a pan-India solution for the quick online purchase and fast delivery of prescription medications. The company operates a fully licensed pharmaceuticals portal that offers authenticated prescriptions and over-the-counter medicine along with other health products. It has served more than 5.7 million customers in over 670 cities and towns. 

RRVL is the holding company of Reliance Retail, which runs the largest retail network in the country. This includes a chain of food and grocery-themed supermarkets, electronics stores, fashion outlets, and a number of supporting online portals. According to Reliance Retail's latest quarterly report, half of all brick-and-mortar stores were not operational between April to June due to the COVID-19 pandemic.

“The addition of Netmeds enhances Reliance Retail’s ability to provide good quality and affordable healthcare products and services, and also broadens its digital commerce proposition to include most daily essential needs of consumers,” said Isha Ambani, a director at RRVL.

It is anticipated that NetMeds will eventually be rebranded like several other internet technology companies previously acquired by Reliance-owned entities and become a part of the Jio app ecosystem.

Jio Platforms is a holding company for a number of telecom and internet technology assets that has received substantial private equity backing. Reliance Industries said in a filing that it has committed 19.8% of the INR1.15 trillion received so far with Jio Platforms.

Although Jio Platforms primarily earns revenue from the Jio telecom network, the company seeks to create an ecosystem of Jio-branded apps that can further monetize a subscriber base numbering more than 385 million Indians and increase demand for its telecom and broadband offerings.

JioMart, a daily goods-themed e-commerce platform backed by a nationwide chain of convenience stores is one of the key businesses. There are plans to increase its market share in the e-commerce sector.

Last month, Google joined as an investor in Jio Platforms, and the two companies have said they plan to work together on manufacturing a low-cost smart phone that will further widen the number of Indians who can access modern internet services.

Other Indian start-ups offering online pharmacy solutions include 1mg, Medlife, PharmEasy and Healthkart. Netmeds differs from some of them in that it owns a distribution and sales network backed by Dadha Pharma, a Chennai-based manufacturer and distributor of pharmaceutical products.

Recently, Amazon India also launched Amazon Pharmacy in Bengaluru, where users will be able to order medical goods on the platform. It plans to roll out the service in other cities in the future.

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• Topics
• South Asia
• Exits
• Technology
• Consumer
• Healthcare
• India
• Reliance Industries
• Reliance Retail Ventures Limited
• Sistema Asia Fund
• e-commerce