Online pharmacy set up in garden shed dials up $10 million Atomico-led investment

Venture capital firm Atomico has stepped up to lead a $10 million investment into ChemistDirect.

Online health service ChemistDirect has netted a return investment from Atomico and new backing from Lepe Partners and dmg media.

The $10 million (£6.6 million) transaction will be used to provide more products and advice via its online health and beauty market.

Atomico first became involved with the business back in 2009 when it led a £3 million equity investment into the business.

Mitesh Soma launched the online discount pharmacy in November 2007 out of his garden shed with a personal investment of £100,000 and a bank overdraft of £150,000.

He has since grown the business to a level where it is ‘on-track’ to deliver year-on-year revenue growth of 90 per cent.

Stuart Rowe, CEO of ChemistDirect, comments, ‘What we care about is giving families products and advice they can trust at a price they can afford.

‘We’re excited that this new investment means we can do even more.’

According to a statement, two thirds of ChemistDirect sales are from repeat customers and Atomico’s involvement has allowed it to increase its revenues five-fold.

Alongside Atomic (the investment firm of Skype’s Niklas Zennstrom), new backer dmg media has taken an equity stake in the business. Investor dmg is the consumer media division of Daily Mail and General Trust and has portfolio companies including Wowcher, Evenbase and Zoopla.

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Mattias Ljungman, partner at Atomico, says, ‘In the time we’ve been working with Stuart and his team, we’ve been really impressed with their absolute focus on the consumer. It’s a strong team, with some exciting new talent in key areas of the business.’

Going forward, ChemistDirect will be targeting the reported £35 billion health and beauty network which, according to findings from campaign group Wholegrain Goodness, is seeing a move towards online. Some 51 per cent of British adults now look online for health advice, the 2013 study says.

Dominic Ward, partner at Lepe Partners, adds, ‘The online health and beauty market is already huge but is a fraction of its potential.

‘It’s a very exciting space and ChemistDirect has already built trust and loyalty from tens of thousands of families.’

Hunter Ruthven

Bernard Williamson

Hunter was the Editor for from 2012 to 2014, before moving on to Caspian Media Ltd to be Editor of Real Business.

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Venture capital funding