Two of India’s most prominent healthtech startups are announcing merger today, in first signs of consolidation as an after effect of the COVID-19 pandemic. E-health companies Medlife and PharmEasy have agreed to merge with the aim to create one of India’s most valued healthtech companies. The merger came up in regulatory filings, accessed by the Economic Times. It is important to note that the deal is still pending approval from the Competition Commission of India (CCI).

Medlife is an Indian online pharmacy founded in 2014 by founded Prashant Singh and Tushar Kumar. The Bangalore based company is valued at Rs 100-crore in gross merchandise value (GMV) per month and is backed by companies like Wilson Global Opportunities Fund and Uno Family Trust. It is important to note that Medlife is not earning any profits as of now.

PharmEasy, founded in 2015, is also an online pharma company spread in over 200 cities with investors including Temasek Holdings and Bessemer Venture Partners and Infosys. Temasek had led a massive $220Mn in November of last year, valuing PharmEasy at $700 million. It is still among one of the largest deals in the healthtech sector globally.

As a part of this deal, the smaller company MedLife will sell 100% of its shares to PharmEasy’s parent company-API Holdings, and will get a 19.59% share of the merged combined company. PharmEasy will hold the remaining 80 percent stake and has a  deal at its hand that has been valued at  $1.2 billion. Medlife’s CEO Ananth Narayanan, will remain in the combined company as an advisor for some time, with Medlife’s stake now worth around $235 million.

“The proposed combination relates to the acquisition of 100% equity shares of Medlife by API Holdings, and as consideration, the acquisition of up to 19.59% of the equity share capital of API Holdings (on a fully diluted basis), by the Medlife Promoter Shareholders and other shareholders of Medlife,” read the filling made by the country’s antitrust body

These companies have been in talks about the merger since July but Medlife couldn’t raise funds from external investors.

The Indian healthcare industry is a booming market that is expected to see huge growth in the coming years. It is expected to grow at 17 percent and reach $353 billion. The COVID pandemic has been a blessing in disguise for this industry. Last week Amazon introduced an e-pharmacy service in Bengaluru plus it is also in talks to acquire Netmeds.