 "MedPlus to raise $ 50-70 mn, launches online lab services")
Country's second largest pharmacy retail chain MedPlus on Thursday said it was in process of raising $50- $70 million from private equity investors to partly fund the ongoing business expansion.
"The fund raising process will be completed by the end of March, 2016. While some of the existing PE investors are selling their stake in the company the funds are also being raised to invest in the business," Madhukar Gangadi, founder and CEO of MedPlus told reporters here.
With a chain of 1,300 stores across 150 cities across India, MedPlus is not only growing its network by adding 200-250 stores each year but was also planning to take the on-line medical store, medplussmart.com, to pan India from the five cities where it is currently operating, according to him.
On Thursday MedPlus has launched MedPluslab.com, an on-line clinical lab testing services in Hyderabad with a plan to quickly expand the services to Chennai, Bangalore and Kolkata.
MedPlus is expected to close the year with a revenue of little over Rs 1,800 crore as compared to Rs 1,350 crore in the previous year. The on-line pharmacy service format is already contributing about 10% to the company revenues and it's share is likely go up to 20% in the coming months, Madhukar Gangadi informed.
Private Equity investors hold as much as 70% equity in the company while a 20% stake is held by the company founder. The company employees and other investors hold the rest of the equity. Credit Suisse is assisting the company in the current round of fund raising, according to him. Currently the company employes around 10,000 people in its retail endevour.
Responding to a question, the company CEO said there was ample opportunity for MedPLus to grow to a size of as big as 10,000 stores with a 20% market share. The company would grow both the physical and the on-line pharmacy formats depending on what customer wants, according to him.
Apollo Pharmacy is touted to be the largest pharmacy chain in the country.
The MedPlus company's latest offering MedPluslab offers home collection of test samples and home delivery of test results besides a straight 50% lower rates on all clinical laboratory tests in Hyderabad city.
A quick turnaround time, lower rates, assured quality of lab tests and the convenience of sample collection from the patients' homes are some of the advantages based on which this model cab be quickly scaled up, said Surendra Mantena, chief operating officer of MedPlus.
Size of the Indian diagnostic market is around $2.2 billion in the year 2014-15 and is growing at 18% CAGR, according to Gangadi. About 85% of the existing clinical laboratories in the unorganised sector and is offers a big opportunity for the online-based clinical lab service firms like them, he said.
