New York-headquartered Acumen Fund has written off its investment in Medicine Shoppe India, one of the largest pharmacy chains in India. Acumen Fund invested a sum of $1.1 million or Rs 5 crore in Medicine Shoppe India back in 2006 while another investor Ventureast APIDC too invested in the company in 2005.
Varun Sahni, the India director at not-for-profit venture capital firm, Acumen, has confirmed this development to VCCircle. Biotechnology Venture Fund, managed by Ventureast APIDC, is also an investor in Medicine Shoppe. The status of Ventureast’s investment in the company is not known. VCCircle could not reach the company at the time of posting this story.
This development comes after US-based Cardinal Health Inc., who owns the franchise Medicine Shoppe, decided to pull out of the Indian operations. Cardinal Health is currently ranked 18th on the Fortune 500 list and has reported revenues of over $99 billion in 2009.
Mumbai’s Melrose Trading Company, the Indian partner who owned majority stake in the company, is currently settling liabilities with other sub-franchisees, according to this report.
Medicine Shoppe had expanded its network to 130 as of July 2007 with revenues touching Rs 50-60 crore. The company reportedly suffered from high rental costs and also faced competition and resistance from local retailers and trading bodies.
There are a number of players in the unorganised pharma retail market. Some of these arms of healthcare chains and pharmaceutical majors like Apollo Pharmacy, Himalaya, Fortis, among others. There are also some players which are backed by PE firms such as Guardian Lifecare Pvt Ltd, which has investments from Samara Capital; Hyderabad-based MedPlus Health Services with bagged funding from Peepul Capital and NEA-IndoUS Ventures.