Another week, another start-up bets big

June 28

Happy Monday folks, here's hoping the week has gotten off to a good start. For those in the US, hope you have fun plans in the run-up to 4th of July. Anmol and I are both traveling this week. I'm in the Pacific Northwest, where there's a once-in-a-generation heatwave going on. It was 46 degrees in Portland today, which is insane. Definitely felt like I was in the Delhi heat.

Also, a quick note: we know we've been a bit intermittent with the daily Whatsapp updates. It's largely been due to work pressures on both of us, and going forward, we'll be keeping to a weekly schedule with this newsletter. We have also heard from many of you, that daily updates can be a bit of overkill, so hopefully this also reduces the content overload.

Coming to the news, the big focus in the news letter today is another major move by a start-up this time in the healthcare space.

💊 PharmEasy to acquire majority stake in listed Thyrocare for $600M

  • It definitely feels like Indian start-ups are becoming mature. Last week, we covered the news of BharatPe and Centrum acquiring PMC bank. This week yet another start-up made a play for an established player. Start-up PharmEasy, the online pharmacy and diagnostic chain, will acquire a 66.1% stake in publicly listed Thyrocare, which runs a diagnostic lab chain, for ~$613 million.

  • This will be the first-ever acquisition of a publicly listed firm by a unicorn startup in India. ePharmacies account for ~5% of drug sales in India, and PharmEasy is the largest player with a ~60% share. According to Jeffries, PharmEasy currently has an annual GMV of ~$1B and has grown at a 50% CAGR over the last three years.

  • Thyrocare is India’s largest diagnostics solution provider (by volume, it performs over 110 million tests in a year). The 26-year-old firm also operates a network of over 3,330 collection centers in 2,000+ towns in India.

  • The Thyrocare acquisition makes sense for PharmEasy, since the firm has already expanded into diagnostics. Since earlier this year the company was building up its own network of labs to reduce reliance on third party firms. Thyrocare's network of labs across India, will allow PharmEasy to accelerate its diagnostic capabilities.

  • The company is focused on becoming the go-to provider for outpatient healthcare products and services and is also reportedly contemplating a subscription plan to provide complete packaged solution to customers covering everything from doctor consultation, diagnostics and drugs purchases for a year.

  • PharmEasy currently accounts for ~3% of pharma distribution in India, and wants to increase this to ~10%. The Thyrocare purchase, which will allow it to embed itself more deeply in the outpatient healthcare cycle, is a step in this direction.

  • That said, as with any M&A, the proof of the pudding will be in the execution. On paper, the synergies are there. How quickly and effectively they are realized is to be seen.

📰 Other news

  • Fintech Slice, which allows Indian millennials to get access to a "credit" card has raised $20 million in a new financing round from existing investors Gunosy, Blume Ventures and others.

  • Music and podcast streaming app Gaana has raised $40 million from existing investor Tencent in one of the largest debt rounds for a consumer internet company in India in 2021.

  • Social commerce platform OneCode is apparently in talks with Nexus and Sequoia's Surge for its first round of funding. OneCode connects e-commerce companies with re-sellers to sell their products and services to less tech-savvy users.

📚 Reads of the week