Mergers and Acquisitions

How acquiring Dawailelo will help 1mg expand its operational presence in Tier II and Tier III cities

Sindhu Kashyap
1st Sep 2017
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Close on the heels of its recent round of funding 1mg has acquired Dawailelo, an online medicine delivery and consultation platform popular in tier II and III cities. The Dawailelo team will be reporting to 1mg’s e-pharmacy team COO, Tanmay Saksena.

For 55-year-old Kamath P getting his blood sugar levels tested was a challenge. Living in a village in Shimoga, getting doctors to visit his village was a real task, and if a doctor did visit, access to his services was another problem.

Over the past few years, while there have been a growing number of healthcare and healthtech platforms mushrooming in metros like Bengaluru, Delhi-NCR, Chennai and Mumbai, few have been able to create the much-needed impact in Tier II and III cities. And these cities are where there is a growing need for these services.

In view of this, the team at 1mg decided to look closely at startups and companies that have been able to create a strong presence in Tier II and III cities. Explaining this, Prashant Tandon, CEO, 1mg remarked that 1mg was keen on building a pan-India presence. And on that front, Dawailelo felt like a good acquisition.

“The team at Dawailelo has done a great job understanding the requirements of customers and created a unique model that has shown great promise in Tier II and III cities,” says Prashant.

Founded by Aditya Agarwal and Arpit Sarin, in 2013, Dawailelo was started in Varanasi to bring in easy access to healthcare requirements and medicines.

“We met Prashant at an event in Delhi and felt that while there were several players in the market, few have been able to address problems in this sector, mainly accessibility and delivery. Also, most of them did not have a pan-India base,” explains Arpit.

Prashant with Dawailelo team (L-R - Aditya, Arpit, Prashant, and Tanmay)

He adds that after meeting Prashant the team felt that they would be better equipped to reach a wider audience by joining hands with 1mg. The company is now looking to establish an efficient and stable digital healthcare channel under 1mg across different Tier II and Tier III towns across India.

“The kind of penetration that the Dawailelo team has been able to make across Tier II and III cities is what gives them the added edge. Also as entrepreneurs, the team had the drive to solve the healthcare problem in India,” he explains.

In July last year, 1mg had acquired Medd, a diagnostics and imaging tests marketplace, in an undisclosed deal. In January, Practo, the doctor consultation platform also raised an additional $55 million in Series D funding led by Tencent. And later in April, Practo also rebranded itself as a complete healthcare platform that focused on appointments, consultations, health records, and insurance. A Sequoia-backed company, Practo, also ventured into the online pharmacy space late last year.

The additional funds that 1mg had raised this year, would be used in building new lines of business, largely with corporates, insurance, and pharma companies. The team is looking at corporate wellness offerings for their workforce, outpatients’ insurance facilitation for insurance companies, and patient support and adherence programmes with pharma companies.

Prashant also commented that they would also focus on deeper penetration into the country and look at data and intelligence based tech development.

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