Healthcare e-commerce portal Netmeds has raised $14 million from Cambodian investment holding company, Tanncam, with participation from Russia’s public investment company, Sistema’s India-centric venture func Sistema Asia Fund. The funds will be used to expand Netmeds’ user base, as well as to expand to more locations in the country.
Following this round, Tanncam and Sistema will join healthcare focused investment firm OrbiMed and investment bank MAPE Advisory Group, plus Netmeds’s founder & CEO Pradeep Dadha and his family investment fund as equity stakeholders in the company. The stake held by each company and Pradeep Dadha wasn’t disclosed.
A year ago, in October 2016, Netmeds had raised $50 million from OrbiMed, with participation from MAPE Advisory Group and Dadha’s family investment fund. At the time, the company had said that it will use the funds raised to develop its back-end infrastructure and logistics, and to increase consumer awareness.
Netmeds began operations in June 2015. It offers a selection of both prescription drugs and non-prescription products, besides personal care, wellness and household products, and claims to have an inventory of 22,500 stock keeping units (SKUs) of prescription drugs and 3,000 SKUs of over-the-counter (OTC) products.
Customers need to upload a prescription to order medicine using the app or the Netmeds website. It also provides services such as automated refill reminders, loyalty programs, information on more cost-effective substitutes, order history, data records, and digital copy of prescriptions among others. Netmed also tracks medical purchases in order to prevent drug abuse and self-medication. Note that according to the company’s terms and conditions, it says that a caregiver for a patient can order medicine on their behalf.
Currently, Netmeds currently has 8 fulfilment centres in Chennai, Bangalore, Hyderabad, Delhi, Pune, Ahmedabad, Raipur and Kochi, and the company said that it will open 6 more over the next 18 months.
In November last year, Netmeds had acquired Delhi based Pluss, which was an app that customers could use for ordering and delivery of medicines and other health related products. Following the acquisition, Pluss was merged into Netmeds. At the time, Netmeds claimed to have 1 million users from 700 cities and that 65% of its business came from Tier II and Tier III cities.
Netmeds’ primary competitor is online pharmacy marketplace 1mg, which raised $15 million in July this year. Currently, 1mg delivers medicines, prescription drugs, medical devices, personal care items, among others in metro cities and state capitals. It claims to witness 20 million monthly visits on its platform. It also provides online diagnostic service which allows users to schedule a lab technician visit for collecting blood samples, and the results are sent to the user via post and email.
Online pharmacy policy in India
India doesn’t yet have a policy for regulating online pharmacies, but the Central Drugs Standard Control Organisation (CDSCO), which regulates pharmaceuticals and medical devices in India, and the Ministry of Health and Family Welfare are currently working towards framing a policy for regulating online pharmacies. The government wants to set up an electronic platform, which will be the focal point for monitoring all sales via online pharmacies.
Earlier this year, the Ministry of Health had begun a public consultation regarding an electronic platform for regulating the sale of medicines in India. A revenue model had also been proposed for this portal: a small transaction fee of not more than 1% of total cost of medicines, subject to a ceiling of Rs 200 per prescription, to be paid online by pharmacies/e-pharmacies/wholesale/retail distributions, etc.”, as well as a “small amount of registration fee and renewal fee for manufacturers/pharmacies/hospitals/clinical establishments, etc.”