RATAN TATA INVESTS IN A TEENAGERS E-PHARMACY STARTUP GENERIC AADHAR
Arjun Deshpande is the Founder and CEO of the start-up called Generic Aadhar and is trying to make medicines affordable.
Mr. Ratan Tata invests in Eighteen-year-old Arjun Deshpande’s Tonic, Generic Aadhar. This start-up will not fail to amaze you. Firstly because, Mr. Ratan Tata himself chose to invest in it. Secondly, because you would not have guessed that the age of this entrepreneur is just Eighteen!
Generic Aadhar was born two years ago when Mr. Deshpande was sixteen. From his travels across countries like the US and Dubai, he realised that India was a leading manufacturer of medicines and yet medicines available to Indians were costlier than outside. Most of the health care and medicines available for purchase to the common man is unaffordable.
Therefore, he started the venture with the aim to make medicines easily accessible at cheaper prices to common Indian people. The CEO had dreams of becoming a job-creator and not a job-seeker.
And Voila! Mr. Ratan Tata, an Indian industrialist, philanthropist, and a former chairman of Tata Sons decided to invest an undisclosed amount in his venture.
"Sir Ratan Tata has invested in Generic Aadhar two days ago for 50 per cent stake and a formal announcement will be made soon," said Deshpande.
Mr. Deshpande confirmed the inking of the deal but did not disclose the amount of the contract. He also mentioned that Mr. Ratan Tata patiently heard his plan three to four months prior to the contract, helped him in running the company and guided him as a mentor.
In the past, Mr. Tata has invested in many start-ups, namely, Ola, Paytm, Snapdeal, CureFit, Lenskart, Urban Ladder, and Lybrate. Similarly, the investment he made into Generic Aadhar was made at a personal level and not on behalf of the Tata Group.
Two years ago, Deshpande started Generic Aadhar. It now has an annual revenue of INR 6 crore. The start-up follows an innovative business model of the pharmacy-aggregator. It supplies generic drugs directly from manufacturers and sells them to retail pharmacies, eliminating a wholesaler margin ranging between 16 and 20%.
Even in the current situation of the COVID-19 pandemic, India is the largest manufacturer of hydroxychloroquine. India is exporting these medicines generically and not under the name of a brand. This is also the central focus of the start-up by Mr. Deshpande, Generic Aadhar. The medicines are purchased directly from manufacturers and do not have the 16-20% wholesaler margins.
Nearly thirty such retailers, from the cities of Mumbai, Pune, Bangalore and the state of Odisha, are part of the Generic Aadhar chain and follow a profit-sharing model. These are mainly independent pharmacies that have found it difficult to cope with increasing competition from existing drug stores and online pharmacies.
The stores running as part of the chain are provided with the branding, logo and required infrastructure from the Generic Aadhar headquarters located currently in Thane, Maharashtra. These retailers are facing a lot of business competition from both online and offline stores which are better established. The firm has employees numbering about fifty-five, with pharmacists, software engineers and marketing professionals.
Generic Aadhar plans to expand its services to the states of Maharashtra, Gujarat, Andhra Pradesh, Tamil Nadu and Delhi in the upcoming year, according to Mr. Deshpande. The firm wants to build a chain of 1000 retailers built on a franchise-model.
The company has a tie up with four WHO-GMP certified manufacturers in Palghar, Ahmedabad, Pondicherry and Nagpur. It provides medicines for two commonly found diseases in most middle-aged Indians, diabetes and hypertension, at a very low price. The company aims to be able to procure Cancer medicines from Baddi in Himachal Pradesh and sell it at equally cheap rates.
In Deshpande’s own words, as he spoke to ET Now about how his start-up processes itself, he says, “I am creating an ecosystem in pharma industries where our Indian people can get medicines from our manufacturing facility and they can definitely save their hard-earned money.” Generic Aadhar pools in its medicines directly from the GMP-approved facilities and gives it to retailers. All the costs in between are cut down.
He also adds that in India there are some companies which market medicines as “branded” and that increases the cost of the basic product, which becomes the burden of the patient or purchaser.
Deshpande has said in his interviews that he got the support he needed to start his business at such a young age from his father. He made an initial investment of INR 15 lakh borrowed from his father. His parents run their own business. His mother has a pharmaceutical marketing company and father is a travel agent.
As mentioned before, he was sixteen when he started the firm, and he was not eligible to sign contracts but was able to be a shareholder in his own company. When he explained his idea to his team, they agreed that he had an impactful idea for an enterprise. Soon after, Deshpande convinced the first medical store to get aggregated by his company.
In the last two years, Mr. Deshpande had been creating a lot of awareness by organising health camps outside aggregator stores, and that is when Mr. Ratan Tata noticed the efforts of the entrepreneur to bring a societal change and initiate a chain of value for the society.
The big day came when the tycoon, Mr. Tata himself, invited Mr. Deshpande for a two-hour long meeting. The young entrepreneur felt thrilled and confident all the same that his model would get appreciation from Mr. Tata because of the philanthropist the latter is, and because of his concern for the society.
In fact, a prominent pharmacy chain owner also expressed interest in raising the stake in Generic Aadhar a year ago, but it did not bear fruit. Last year, Deshpande, who was also a student at Mumbai College, was nominated for the Thiel Fellowship in Silicon Valley, a two-year program for young adults who want to build new firms.
In recent years, the government is attempting to put all vital drugs under subsidized prices. Roughly 80 per cent of drugs sold in the country, including 50,000 brands, are beyond price controls and enjoy margins of around 30 per cent-20 per cent for suppliers and 10 per cent for wholesalers. The profits also are significantly greater for premium branded products in categories such as cancer and cardiovascular goods.
Edited by Shraddha Jha
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