Champ in The Making
Business Today|August 08, 2021
PHARMEASY’S DEAL TO BUY THYROCARE IS THE FIRST-EVER ACQUISITION OF A LISTED COMPANY BY AN INDIAN UNICORN. HERE IS THE STORY BEHIND THE MIRACLE
P.B. JAYAKUMAR & JOE C. MATHEW

The rags-to-riches story of Arokiaswamy Velumani, the founder of diagnostics chain Thyrocare, is well-known and a motivation for aspiring entrepreneurs. He was born in a poor family in a village on the outskirts of Coimbatore. His mother funded his education from whatever little she earned from her two buffalos. He graduated in science and after years of struggle got a job at the Bhabha Atomic Research Centre in Mumbai. He worked there for 15 years before starting his own business, painfully building up a diagnostics chain with a one lakh square feet central laboratory in Navi Mumbai. He lived in a small portion of the lab and recruited mostly freshers whom he wanted to help considering his own early struggles. The 62-year-old hogged headlines recently when he sold his pan-India diagnostics chain, Thyrocare, to PharmEasy, a six-year-old e-pharmacy, for ₹4,546 crore.

The deal put PharmEasy’s media face, founder and chief executive officer Siddharth Shah — a 32-year-old computer engineer and IIM-Ahmedabad graduate who comes from a rich family in Mumbai and is fond of cars — into the limelight as a new-age business celebrity. It is, after all, going to be the first-ever acquisition of a listed company by a startup. PharmEasy, which became India’s largest e-pharmacy after the acquisition of its rival, Medlife, has been the first Indian e-pharmacy start-up to enter the unicorn club. The Thyrocare deal, backed by many leading private equity entities, has doubled its valuation to over ₹30,000 crore ($4 billion).

The deal is being celebrated as another story of a new-age business whizkid mentored to success by experienced private equity masters. However, probe a little, and the story turns out to be different. Siddharth, despite his privileged background, exemplifies the struggles new-age entrepreneurs go through to script success.

Born Entrepreneur

Unlike most rich kids who work for global financial firms to gain experience for running their family business, Siddharth never tried to get a job. The parents of this three-time national go-karting champion in his school days were liberal enough to allow him to choose what he wanted to do in life. His first ambition was to become a race-car driver. His mother used to take him for races from city to city despite having a busy schedule. He studied computer engineering in college and at 21 got into IIM-Ahmedabad. As part of management studies, all students had to develop a business plan. Usually, everyone submits the project, gets marks and tries for campus placement. “My professor Anil Gupta told me ‘instead of a project plan, why don’t you float a company and show how to run it?’ I went on to register a company, DialHealth, a concept for India’s first online pharmacy. That is how the story began,” says Shah. After a two-month mandatory internship with Goldman Sachs, he opted out of the placement process and decided to start his own business. “My mindset was never fit for a job. I thought if I get a fat job, my mind may get used to its pleasures and comforts. I did not want that to happen,” he says.

The biggest challenge for new entrepreneurs those days was mindset of parents and society, he says. “Nowadays, a lot of youngsters can tell their parents they want to start own business. The concept of start-ups was not cool in 2011-12,” he says. But his parents supported his plans. The first company, DialHealth, was a simple concept like the already successful JustDial. He launched it with Hardik Dedhia, a childhood friend and a Carnegie Mellon graduate. Four months later, another friend and a Narsee Monjee Institute of Management Studies alumnus, Harsh Parekh, joined as partner. They floated a website, dialhealth.com, with a simple dial-in number (4000 5000) for information, consultation with doctors and getting connected to a nearby pharmacy for medicines. Within months, customers flooded the portal.

Failed Starts

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