PharmEasy Secures $216 Million Despite Valuation Drop

PharmEasy’s parent company, Api Holdings Limited, has secured $216 million in a fresh round of funding, according to a report by Entrackr. This accomplishment comes amidst a significant decline in the company’s valuation, which has dropped by 90% from its peak. The funding round was spearheaded by Manipal Education and Medical Group (MEMG), with substantial contributions from existing investors.

Breakdown of Investment

MEMG’s family office emerged as the frontrunner in the investment round, contributing a significant sum of Rs 800 crore. Prominent participation also came from existing investors, including Prosus (Rs 221 crore), 360 One (formerly IIFL Ventures, Rs 200 crore), and Temasek (Rs 183 crore). Additional funding amounting to Rs 400 crore was secured from CDPQ Private Equity, WSSS Investments, Goldman Sachs, and Evolution Debt Capital.

Strategic Allocation of Funds

Following the successful fundraising, the board of API Holdings has approved the allotment of 18,63,74,897 cumulative convertible preference shares. These shares will be issued at a price of Rs 96.8 each, raising a total of Rs 1,804 crore. This move aligns with the company’s broader strategy to convert these shares into equity on a 1:20 basis. Notably, API Holdings has been aiming to raise Rs 3,500 crore since August 2023, primarily to settle outstanding debt obligations to Goldman Sachs.

Crucial Step Towards Financial Stability

The funding announcement follows a crucial step for PharmEasy – the Competition Commission of India’s (CCI) approval of investment proposals from MEMG’s family office and 360 One in API Holdings. This green light from the regulatory body is a significant development for PharmEasy as it strives to solidify its financial standing after a loan default in June 2023, which negatively impacted its valuation.

Revenue Growth Amidst Financial Challenges

Despite facing financial hurdles, PharmEasy reported a 16% increase in revenue for the financial year ending March 2023. The company’s earnings reached Rs 6,643.9 crore, reflecting a rise from Rs 5,728.8 crore in the previous year. However, it’s important to note that losses also widened by 30% during the same period, totaling Rs 5,211.7 crore.

PharmEasy’s Legacy in Online Healthcare

Founded in 2015 by a team of visionaries – Dharmil Sheth, Dhaval Shah, Harsh Parekh, Siddharth Shah, and Hardik Dedhia – PharmEasy has established itself as a leading online pharmacy and healthcare platform in India. The company offers a comprehensive range of services, including not only medications but also diagnostic tests through its affiliated brands. PharmEasy’s journey underscores its continuous efforts to revolutionize the Indian healthcare landscape.