Companies

Flipkart Health acquires Sastasundar Healthbuddy for undisclosed sum

Our Bureau Kolkata | Updated on November 19, 2021

The transaction tentatively should be effective on or before December 17 this year.

Walmart-backed Flipkart is acquiring Kolkata-based online pharmacy startup SastaSundar to enter the healthcare segment in India.

Flipkart on Friday said it has signed definitive agreements for acquiring a majority stake in the eight-year-old SastaSundar, but has not disclosed the deal size.

Eight-year-old SastaSundar was last valued at $125 million in a financing round in 2019, said sources aware of the matter. Global investors who have backed SastaSundar include Mitsubishi Corporation and Rohto Pharmaceuticals, both from Japan.

According to a stock market notification by SastaSundar Ventures, the parent company, its subsidiary, Sastasundar Healthbuddy Limited (SHBL), has entered “into a share subscription and purchase agreement” with Flipkart Health Pvt Ltd, under SHBL’s divestment of its equity holdings in Sastasundar Marketplace Limited (SML).

Sastasundar Marketplace, a wholly-owned subsidiary of SHBL, runs the online pharmacy, SastaSundar.com. The marketplace has a network of 490 pharmacies. “Consequent to the above-mentioned proposed transaction, SML will cease to be a step-down subsidiary,” it said.

The online pharmacy had a standalone turnover of Rs 2.58 crore in FY21 or 0.47 per cent of the total consolidated turnover of Rs 549 crore (apprx). In terms of net worth, SML’s net worth was 1.82 per cent or Rs 4.17 crore out of a consolidated net worth of Rs 229.37 crore.

“The company will not be receiving any consideration concerning the proposed transaction under the Definitive Agreements. The total consideration defined in the Definitive Agreements will be received by subsidiary and step-down subsidiary of the company upon completion of the proposed transaction. The total consideration will not be less than the fair market value determined based on the report by the registered valuer,” SastaSundar Ventures said to the bourses.

The sale transaction should tentatively come into effect from December 17.

Healthcare Foray 

Flipkart, in a press release, said its healthcare vertical would be called Flipkart Health+. Starting with e-pharmacy, the scheme will add new healthcare services such as e-diagnostics and e-consultation over time. Flipkart Health+ will report to Ajay Veer Yadav, Senior Vice President and Flipkart veteran.

The e-commerce major’s planned foray into the healthcare space comes when the e-pharmacy market is witnessing consolidation and aggressive investments. E-pharmacies, despite their recent boom, continue to contribute in single digits in the overall pharmacy market.

Amazon India, Flipkart’s chief rival, began selling medicines on its marketplace last year, while Reliance Retail acquired the parent company of online pharmacy Netmeds last year. Tata Digital brought online pharmacy 1 mg in June.

PharmEasy has filed for an over Rs 6000 crore initial public offering too.

According to Ravi Iyer, Senior Vice President and Head of Corporate Development at Flipkart, the consumer internet ecosystem in India is growing rapidly.

“With growing awareness and focus on health heightened by the pandemic, there is a large opportunity and demand for affordable healthcare and ancillary offerings,” he said in a statement adding that: “The synergies between the Flipkart Group and SatsaSundar.com, combined with our commitment to prioritize our customer’s needs, will help us grow and transform online healthcare in India.”

Published on November 19, 2021

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