Tata 1mg in Advanced Talks to Raise USD 200 Million, Valuation Standoff Emerges
New Delhi: Digital health platform Tata 1mg is in advanced talks to raise around USD 200 million, with leading global investors including Novo Holdings, Canada Pension Plan Investment Board (CPPIB), Permira, and ChrysCapital showing strong interest.
According to a recent media report in the Economic Times, the discussions, however, face a valuation hurdle. While Tata 1mg was valued at $1.25 billion post-money in its 2022 round, potential investors are reportedly pushing for a revised valuation in the $750–800 million range. In addition, some are demanding board seats and additional rights, conditions the company is unwilling to accept.
If the deadlock continues, Tata Sons may step in with about $75 million in a down round, or the company may opt for a smaller fundraising exercise. Sources suggest that Tata 1mg currently needs around $125 million in fresh capital.
“1mg continues to perform strongly, with smooth execution and no major challenges on the delivery front,” a source told ET. “Our integration with Tata Neu (positioned as a super app) has further accelerated growth and significantly scaled up the business. Investor interest in 1mg has always been encouraging … funding is not a concern for us and will be secured in line with the best available options.”
Tata Digital, which owns about 63% of Tata 1mg, remains the company’s majority shareholder. Other key investors include Sequoia, Intel Capital, Omidyar Network, and the Bill & Melinda Gates Foundation. In FY25, Tata 1mg reported consolidated revenue of ₹2,392 crore, up 22% year-on-year, while reducing its consolidated loss to ₹276 crore from ₹313 crore in FY24.
The company is also expanding its portfolio beyond e-pharmacy into diagnostics, consultations, and offline presence, while enhancing delivery services that promise 4–5 hour fulfillment in many cities and 30-minute express delivery for select orders.
ET reports that Tata declined to comment on the fundraising talks. Meanwhile, Permira, CPPIB, and ChrysCapital either declined or said they were unaware of the deal, while Novo Holdings did not respond.
Although online pharmacies account for only 3–5% of India’s overall pharma market, investors continue to see significant growth potential despite thin margins, regulatory risks, and heavy losses faced by competitors.
