Japan’s Rohto Pharma buys stake in e-pharmacy Sastasundar
Advertisement

Japan’s Rohto Pharma buys stake in e-pharmacy Sastasundar

By Joseph Rai

  • 23 May 2017
Japan’s Rohto Pharma buys stake in e-pharmacy Sastasundar
Credit: Shah Junaid/VCCircle

Sastasundar Healthbuddy Ltd, which runs online pharmacy Sastasundar.com, is raising funds from Japanese drugmaker Rohto Pharmaceutical Co Ltd.

Rohto will invest $5 million (Rs 32.4 crore) in Sastasundar Healthbuddy for a 13% stake, the Indian company’s parent Sastasundar Ventures Ltd said in a filing to the stock exchanges.

The transaction is likely to be completed within 45 days from the date of the execution, it said.

Advertisement

Sastasundar Healthbuddy, which was founded in 2011, sells medicines and fast-moving consumer goods on its digital platform. Its services were available only in West Bengal and it was processing an average of 5,000 orders on a daily basis, according to its annual report for 2016.

The company, co-founded by Ravi Kant Sharma, also had its own 119 brick-and-mortar Healthbuddy stores covering 15 districts of West Bengal with 300,000 registered households.

Its gross merchandise value (GMV) in the fiscal year ended 31 March 2016 was Rs 89 crore, according to the annual report. Its own product brands ranging from tea to spices are also sold on e-commerce websites like Amazon, Flipkart and Snapdeal, it said.

Advertisement

The company was looking to roll out its own diagnostics, doctor appointment and digital health platform.

Rohto Pharma

The Japanese firm, which was founded in 1989, offers a variety of over-the-counter health and skin care products.

Advertisement

It entered India in 2010 with its first lipcare brand ‘LipIce’. The following year it launched a range of products – “LipIce Color” under its brand LipIce.

Subsequently, it launched two new brands—OXY specialised skin care range for men, and Acnes for specialised acne care—in the country.

Japanese investors have been very active in the Indian startup space. These investors include SoftBank, Rebright Partners and Netprice.com Inc. Technology major SoftBank recently invested a whopping $1.4 billion (around Rs 9,000 crore) in One97 Communications Ltd, the parent of digital wallet Paytm.

Advertisement

Online pharmacy

A string of heavyweight investors including private equity firm OrbiMed and venture capital firm Sequoia Capital have invested in online pharmacy companies in the country despite regulatory uncertainties.

The segment came under the scanner of the Drug Controller General of India scanner in May 2016 after the Food and Drug Administration of Maharashtra filed a police case against Snapdeal for selling prescription drugs. Since then investment in the market has become a contentious issue but money has continued to flow.

Advertisement

The government, in the Budget 2017, proposed to amend the Drugs and Cosmetics Rules to ensure availability of drugs at reasonable prices and promote use of generic medicines, indicating clarity in the online pharmacy business.

The most recent investment in the segment was in Bangalore-based Metarain Software Solutions Pvt Ltd, which runs pharmacy app Myra Medicines, from investment firm Matrix Partners India and media company Times Internet.

In April last year, Sequoia-backed 1mg raised Rs 100 crore ($15 million) in a Series B funding round led by Maverick Capital Ventures, the venture capital arm of US-based hedge fund Maverick Capital. Sequoia and Omidyar Network also participated in that round of funding.

Netmeds, another major online pharmacy company, received investment commitment of $50 million from healthcare-focused global PE firm OrbiMed, among others, in October 2015.

Share article on

Advertisement
Advertisement
Google News Icon

Google News

Follow VCCircle on Google News for the latest updates on Business and Startup News