Tata 1mg To Raise $300 Million To Expand Offline Presence

Tata 1mg is looking to raise $300 million as part of its plan to grow its offline presence, according to reports. 

Tata Digital had bought a strategic stake in 1mg in 2021. Since then, 1mg has only raised $40 million through a rights issue from Tata Digital in 2022.

The planned $300 million funding signals a shift in strategy for the Tata Group, which had previously asked 1mg and BigBasket to rely more on debt for growth.

In addition to focusing on offline sales, Tata 1mg is also expanding its institutional business.

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Currently, 70% of the company’s revenue comes from its business-to-consumer services, which include e-pharmacy, e-diagnostics and consultations. In the institutional segment, 1mg partners with hospital chains, clinics, and insurance companies.

The company is also developing a comprehensive approach to managing specific diseases, starting with obesity and cancer.

1mg is opening its own offline stores in cities like Gurugram, Noida, Ghaziabad, Jaipur, Lucknow, and Faridabad to offer 30-minute deliveries. In areas where it doesn't have stores yet, it has partnered with BigBasket.

Quick delivery companies like Swiggy Instamart and flipkart Minutes are teaming up with PharmEasy for 10-minute deliveries, while Zepto is working on its own delivery capabilities.

However, the rapid expansion of quick medicine deliveries faces challenges, including high costs and strict regulations.

In fiscal 2025, 1mg’s revenue is expected to have grown by 30-35%, reaching around Rs 2,500-2,600 crore, according to sources. The company is burning about Rs 180-200 crore annually, with a large portion of this spent on new initiatives like offline expansion.

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