Medkart, an Ahmedabad-based generic medicines retail network, has raised Rs 40 crore in a Series A round sponsored by Alkemi Growth Capital and Insitor Partners.
Medkart hopes to use the capital to expand to 250 locations by 2023, having developed from zero to 75 stores, primarily in Gujarat but also in Rajasthan and Maharashtra. Apart from Alkemi and Insitor, angel investors such as Prashant Poddar and other UAE experts, including the ex-CEO of IIFL Asset Management, took part in the round. Radix Capital Advisors, a Mumbai-based investment bank, served as Medkart’s exclusive financial advisor.
Medkart, founded in 2014 by Ankur Agarwal and Parasharan Chari, provides WHO GMP certified generic pharmaceuticals at some of the most reasonable prices through its network of over 75 outlets.
Chari had this to say about the fundraiser: “This investment will enable us to continue to develop the infrastructure required to give our consumers with a seamless omni-channel experience. For us, unicorn status will be realised when Medkart has saved $1 billion in medical costs for its clients.”
According to Agarwal, the company largely procures from generic manufacturers to ensure quality as well as better margins while offering affordable rates for customers. As a result, the company has been able to reduce costs for customers by as much as 85 per cent, saving more than Rs 200 crore for its customers over the years with a loyal base of more than 600,000 chronically ill patients.
“Considering medicines is a staple need especially for chronic patients, we aim to disrupt the way medicines are being consumed in India. Being a technology enabled company, we always aim to service our customers at whichever channel they are comfortable with,” said Agarwal.
So far, Medkart has had one of the greatest adoption rates in the market, with a 95% conversion rate from branded to quality generics, as well as a large repeat revenue profile, with roughly 85% of income coming from repeat business. So far, the company has concentrated on establishing a stable supply chain and increasing end-to-end client delivery.
Medkart broke even last year, despite having a topline of Rs 25 crore in the fiscal year 2020-21.
On the back of the Series A round, the company expects to grow at a rate of 25-30% in the future.
“Because retail is a geography-based company, we will focus on expanding our presence in Gujarat and Rajasthan in the first phase of our expansion. We will focus on other states in the second phase, beginning with Maharashtra.
Despite the lack of industry data, the generic medications market is large enough to attract several firms to help lower medical costs “Jan Aushadhi shops, as well as Mumbai-based Zeno Health, are among the company’s competitors, according to Agarwal.