PharmEasy's valuation declines by 90% after raising Rs 1,804 crore: Report

Mumbai-based online pharmacy startup PharmEasy has reportedly raised $216 million or approximately Rs 1,804 crore in a recent funding round, but at a significantly reduced valuation.

According to an Entrackr report, the funding was led by Ranjan Pai's Manipal Education and Medical Group (MEMG) alongside other existing investors. The valuation of PharmEasy has seen a drastic cut to $710 million, down from its previous valuation of $5.6 billion in 2021, reflecting a 90% decrease.

Who invested how much?

PharmEasy's latest round was notably led by MEMG's family office, which invested Rs 800 crore. Other contributions came from prominent investors such as Prosus, which invested Rs 221 crore; Temasek, with Rs 183 crore; and 360 One Portfolios, which contributed Rs 200 crore.

CDPQ Private Equity, WSSS Investments, Goldman Sachs, and Evolution Debt Capital injected additional funds amounting to Rs 400 crore.

PharmEasy's funding challenges

Since August 2023, the startup has actively sought to raise Rs 3,500 crore to address its obligations, including repaying a debt to Goldman Sachs. PharmEasy faced a default on its loan terms with Goldman Sachs in June 2023, which contributed to a reassessment of its valuation.

Investors such as Janus Henderson and Neuberger Berman have subsequently marked down the startup's valuation by significant margins within the last year.

The recent funding round will not only help repay debt but also support PharmEasy's ongoing operations and expansion plans in the competitive online pharmacy market.

Withdrawal of IPO plans

Founded in 2015 by Dharmil Sheth, Dhaval Shah, Harsh Parekh, Siddharth Shah, and Hardik Dedhia, PharmEasy has grown to become a key player in the online pharmacy sector.

The startup had initially filed for an IPO in November 2021 but later withdrew its plans in August 2022 due to unfavourable market conditions.

Despite these challenges, PharmEasy reported a 16% increase in revenue for FY23, reaching Rs 6,643.9 crore, although it also saw a 30% increase in losses, totalling Rs 5,211.7 crore for the year.