PharmEasy's valuation dropped drastically to $456 million by its investor: Report

PharmEasy, an Indian online pharmacy once valued at $5.6 billion, is now believed to be worth about $456 million.

This drastic drop in valuation comes after investor Janus Henderson revealed in a filing that it lowered the value of its 12.9 million shares in the startup to $766,043—far below its original purchase price of $9.4 million.

Janus Henderson’s Valuation  

1. Original investment: $9.4 million.  
2. Current value: $766,043.  
3. Resulting valuation: About $456 million for PharmEasy.

This reflects a 92% drop from PharmEasy’s peak valuation of $5.6 billion. The company’s challenges persist despite raising more than $200 million earlier this year and planning an initial public offering (IPO) next year.

Financial struggles  

PharmEasy’s parent company, API Holdings, reported losses of Rs 2,533 crore in fiscal year 2024 (FY24). Its revenue declined 15% to Rs 5,664 crore from Rs 6,644 crore in FY23.

Despite the lower income, the company did manage to cut its losses by over 50%, mainly due to significantly reduced goodwill impairment charges.

1. FY24 losses: Rs 2,533 crore  
2. Revenue: Rs 5,664 crore (down 15% from FY23)  
3. Reason for reduced losses: 79% drop in goodwill impairment charges

Past funding and rights issues  

PharmEasy has raised more than $1 billion in total funding to date. However, financial pressures mounted after it postponed an $843 million IPO slated for November 2021.

It later turned to debt financing, including a $300 million loan from Goldman Sachs, which became difficult to repay. In 2023, PharmEasy launched a rights issue to raise capital and pay off its debt, securing about $417 million in total.

A recent regulatory filing from April 2024 shows the company also raised around $216 million, led by Manipal Education and Medical Group and existing investors.

1. Rights issue in 2023: Raised $417 million  
2. April 2024 funding: $216 million  
3. Loan from Goldman Sachs: $300 million, repayment challenges

Acquisition history  

PharmEasy purchased diagnostic lab chain Thyrocare for $600 million in 2021—an amount now larger than the company’s current implied valuation of $456 million.

Once touted as a star healthtech startup, PharmEasy’s struggles highlight the impact of a deteriorating market and changing investor sentiment toward consumer-facing tech firms.

PharmEasy aims to revive its fortunes through fresh capital and a potential IPO next year. It is backed by major investors such as Prosus, Temasek, TPG, and B Capital.