PharmEasy, one of India’s leading online pharmacy platforms, has been making headlines recently with its ambitious funding efforts. In a bid to secure additional capital, the company is reportedly seeking new funding rounds, but not without a substantial valuation cut of around 90%. This blog post explores the circumstances surrounding PharmEasy’s funding challenges and the potential implications of its valuation reduction.
Indian online pharmacy startup PharmEasy is seeking to raise approximately $300 million in a new funding round, according to sources familiar with the matter. This comes as some of its investors are urging the company to consider a sale. If successful in securing the new funding, PharmEasy’s valuation will be significantly lower than the total amount it has previously raised. The company is in a race to raise the capital in order to repay its lender Goldman Sachs, after borrowing $285 million from them last year for a majority stake acquisition of Thyrocare. PharmEasy is one of India’s largest pharmacy firms.
The initial plan was to go public with an $843 million IPO but later changed its course. However, recent reports suggest that healthcare group Manipal might lead a $300 million funding round for the company. It has been revealed that some of the startup’s supporters have been pushing for its sale for a while.
API Holdings, the parent company of PharmEasy, was valued at $5.6 billion in its latest funding round. Now, PharmEasy is planning to raise new financing through a rights issue, with shares valued at 5 Indian rupees, significantly lower than the previous valuation of 50 Indian rupees.
If this funding round goes through, PharmEasy’s valuation is expected to drop to around $500 million to $600 million. This puts the startup in the position of being the first major Indian unicorn to raise a down round.
PharmEasy has been on the lookout for new funding for some time, but has struggled to find investors interested in a $2 billion valuation. The company has a strong lineup of backers, including TPG, Prosus, Temasek, B Capital, Bessemer Venture Partners, Eight Roads Ventures, Steadview Capital, and JM Financial.