New Delhi, June 2 -- Digital health platform Tata 1mg Technologies Pvt Ltd is accelerating its expansion across India through a cluster-driven strategy after achieving operating profitability across all its verticals.
The company, part of Tata Digital and backed by multiple investment firms, is increasing its presence across nine clusters in cities such as Mumbai, Delhi NCR and Bengaluru, and aims to more than double its omnichannel footprint over the next 12 months.
Tata 1mg, which started as an online pharmacy more than a decade ago, announced last week that it turned EBITDA positive across all its verticals. The pharmacy business was the last segment to breakeven, which happened in FY26.
In a recent interaction with VCCircle, Tata 1mg co-founder Gaurav Agarwal said the company experimented with various strategies in Gurugram. Since opening its first pharmacy in the city, the company added a diagnostics laboratory, specialty pharma, consumer and retail touchpoints. This cluster-focused strategy led to a "disproportionate improvement" in customer experience. "After launching 30-minute delivery in Gurugram, orders doubled in 6-9 months, and delivery costs decreased due to localised infrastructure," Agarwal said.
"We've identified around nine core clusters, such as Delhi NCR, Mumbai, Bengaluru and Kolkata. We concentrate our infrastructure-retail stores and labs-in these areas to hit higher demand and better unit economics faster," he added.
This strategy is expected to fully unfold over the next 12-24 months. Tata 1mg is also scaling up its retail footprint across the nine clusters from over 280 brick-and-mortar stores to more than 500 stores over the next 12 months as part of its omnichannel strategy.
On the ePharmacy front, Agarwal said Tata 1mg plans to grow the express pharmacy business beyond the current 10 cities but only into a few tier-one cities since customers in smaller markets still prefer better prices over speed. "We have retail stores in 26 cities and use them to test if express service has 'legs' in that market. Mumbai, Delhi and Bengaluru are areas where we are expanding further." Pharmacy vertical accounts for more than 50% of the company's revenue.
Agarwal said organic growth is Tata 1mg's core strategy, however he didn't rule out acquisitions entirely. When asked if the company is eyeing additional capital, he said Tata 1mg is "well-capitalised" and didn't need more capital due to its profitability.
Founded in 2011 by Prashant Tandon, Gaurav Agarwal and Vikas Chauhan, 1mg offers integrated healthcare services including e-pharmacy, diagnostics and e-consultations. It operates a growing network of retail stores across India and uses its omnichannel network to deliver medicines in over 20,000 pincodes. The company also operates 18 diagnostic labs and its at-home diagnostics collection is driven by a fleet of over 1,000 phlebotomists.
In 2021, Tata Digital, a 100% subsidiary of Tata Group holding entity Tata Sons, acquired a majority stake in 1mg for a cash consideration of Rs 720 crore. According to Tata Sons' latest annual report, Tata Digital holds a 67.96% stake in 1mg.
A year later, Tata 1mg raised $40 million in a funding round led by Tata Digital at a valuation of $1.25 billion. KWE Beteiligungen AG, HBM Healthcare Investments, MPOF Mauritius, MAF Mauritius, Rubal Jain and Vardaan also invested in the Tata Group company.
As per VCCEdge data, Tata 1mg's consolidated revenue grew by 19.6% to Rs 2,353 crore, with a net loss of Rs 271 crore and an EBITDA loss of Rs 172 crore in FY25. Agarwal said Tata 1mg's revenue likely rose by around 23% in FY26. He added that the company expects the topline to grow by 27-28% in FY27.
Published by HT Digital Content Services with permission from VC Circle.