Private equity firm Jashvik Capital said on Wednesday that it has acquired a stake in pharma software provider Marg ERP for over ₹400 crore, marking the firm’s fourth investment from its maiden fund, which has a target corpus of $350 million.
The firm is betting on the growth of organised healthcare software as a service (SaaS) in the Indian market, where Marg ERP is currently a market leader. The healthcare software services market in India has been largely unorganised, but with tailwinds like an increasing focus on digitisation, tightening regulatory processes, and a rise in consumer trends, this space is expected to grow, founder and managing partner Naresh Patwari told Mint.
“Healthcare SaaS has been a very large opportunity globally. We think we are at the start of that super cycle in India,” said Patwari. “Our view is that while India is in the early stages of this transformation, our investment in Marg ERP is the first step in building a platform that can ride this super cycle.”
Jashvik Capital, a mid-market PE firm, has in the past made investments in Bharuch-based Jabsons Foods, Bengaluru-based Futura Surgicare and Hyderabad-based eye care chain Smart Vision Eye Specialities Pvt. Ltd.
It is also in the process of closing an investment in pest control and home care products maker Midas Hygiene, which it had announced in February.
Marg ERP, founded in 2000, is one of the country’s largest ERP (enterprise resource planning) and accounting software providers for pharmaceutical retailers and wholesalers. The firm currently has over 500,000 subscribers and is present in India and 32 other countries.
It works largely with players across the pharmaceutical distribution chain, including wholesalers, distributors and pharmacies. It has a market share of over 50% in some segments in the distribution chain, said Patwari.
“Marg is a highly profitable, fast-growing company. Growth has been 25% over the long term and close to 40% more recently. It is a clear market leader and it can compound for the next 10-15 years. We are perhaps at the early stages of a long-term trend,” he said.
The firm plans to scale up Marg’s operations through a mix of organic and inorganic strategies, as well as invest further in R&D, said Patwari. “…the goal is to expand, go deeper in India and to go wider internationally.”
API Holdings, India’s largest digital healthcare platform and parent company of brands like PharmEasy, had acquired a 49% stake in Marg ERP in 2022, which the company’s founders bought back in February this year.
