Generico, a pharmacy retail chain that sells low-cost generic medicines, has raised Rs 10 crore ($1.39 million) in venture debt funding from Alteria Capital.
The transaction is part of Generico’s Series A round of funding, Alteria Capital said in a statement.
The latest investment comes just a little over three months after Generico raised its first venture capital cheque led by Lightbox in September last year.
Generico, which is operated by Workcell Solutions Pvt. Ltd, was founded by Siddharth Gadia and Girish Agarwal. The firm, which has raised an aggregate equity funding of $14 million so far, currently has 49 outlets in Mumbai and plans to increase them to 150 by 2021.
Earlier, Gadia and Agarwal had launched a drug discovery and availability platform Reap. However, as they learned about generics medicines they realised that the cost benefits were not being passed to the end consumers. So, they decided to go offline and pivot the business model to focus on consumers.
Generico initially started operating on a company-owned, company-operated model. But it moved to a master franchise model in which Generico owns the brand and technology while the franchise owns the real estate and the front-end operations. It does not stock any fast-moving consumer goods, unlike most other pharmacies.
Vinod Murali, managing partner at Alteria Capital, said Generico is building a strong network of omnichannel healthcare delivery with pharmacies as the starting point.
“Gadia and the team at Generico have been working hard in creating a brand which has the potential to become a surrogate for trust and efficient patient care which can then be extended to other adjacent opportunities as well,” he added.
Alteria Capital was founded in 2017 by Vinod Murali and Ajay Hattangdi, who were former top executives at venture debt provider InnoVen Capital.
The venture debt firm made the final close of its debut fund at $140 million (Rs 960 crore) in July last year.
Its other investments include Delhi-based student accommodation platform Stanza Living, scooter-sharing startup Vogo and Rebel Foods, an internet kitchen platform that owns and operates a number of brands including Faasos and Behrouz Biryani.
Last year, Alteria Capital also wrote an Rs 80 crore ($11.5 million) cheque to digital lending startup Lendingkart, in one of the largest venture debt cheques written to an Indian company.
Venture debt is becoming an attractive tool of funding for startups as it rarely involves stake dilution by the promoters. It also provides companies more time to grow.