Pharmeasy, based in Mumbai, announced the acquisition of Medlife, a smaller competitor, on Tuesday. This is the largest consolidation deal in India's fast-growing online pharmacy sector, and it comes at a time when Reliance Tata, and Amazon are all vying for a piece of the pie.

“This will make us the largest healthcare delivery platform across the country by a distance -- serving more than two million families every single month,” Dhaval Shah, co-founder of Pharmeasy, wrote on Linkedin.

Launched by  Mikhil Innani, Dharmil Sheth, & Dhaval Shah in 2015, PharmEasy is pharmacy made easy! Started with the sole purpose of making healthcare accessible and affordable to all, PharmEasy today is India’s leading and most trusted online healthcare aggregator in the country. The platform helps patients connect with local pharmacy stores and diagnostic centers to fulfill their extensive medical needs.

Pharmeasy announced in a blog post that Medlife would cease operations and be merged with its own platform on May 25. Medlife customers and retail partners would be brought onto the Pharmeasy platform, according to the company.

“While we love the Medlife brand, we believe that a singular focus on our consumer needs through a single platform ‘Pharmeasy’ will help us solve for consumer needs much better,” Shah added in his LinkedIn post.

The deal, which was completed a while ago, saw Medlife shareholders receive a 19.59 percent stake in Pharmeasy's parent company API Holdings, valued at $240 million.

Prabhat Narain Singh's family office, which was the largest shareholder in Medlife and one of the founders of drugmaker Alkem Laboratories Ltd, also sits on the board of API Holdings.

The acquisition follows a $350 million investment in API Holdings announced last month by Prosus Ventures and US-based private equity firm TPG Growth. API's holdings were valued at $1.5 billion in the transaction, making it India's first unicorn online pharmacy.

Meanwhile, Reliance Retail, Tata Group, and Amazon have made forays into the rapidly expanding sector. While Reliance acquired a majority stake in Chennai-based Netmeds for Rs 640 crore in August, the Tata Group signed a definitive agreement earlier this month to acquire a 65 percent stake in New Delhi-based 1mg. Amazon, too, has started offering its prescription drug deliveries to customers in Bengaluru through its largest seller Cloudtail.

Online pharmacies are one of the few verticals in the country's e-commerce sector that grew during the pandemic's second wave. According to data from the e-commerce services platform Unicommerce, pharmaceutical shipment volumes increased by 18% in April compared to the previous month. Over the same time period, overall e-commerce shipments fell by 11%.

According to insiders, order volumes more than doubled over the course of 2020, while the number of people using online pharmacies tripled. According to market research firm RedSeer Consulting, nine million families used online pharmacies last year.