PharmEasy Secures $216 Million Amid Significant Valuation Cut in 2024

PharmEasy, the online pharmacy, is the new headline for major financial changes. The company has secured $216 Million in funding, led by Manipal Education and Medical Group (MEMG) with existing investors. The funding comes due to the challenging phase, as the company’s valuation has plummeted by 90% from its peak, estimated at $710 million. Stakeholders in PharEasy’s latest funding include MEMG’s family office, contributing Rs 800 Crores. Moreover, contributions came from Prosus with Rs 221 Crore, Temasek with Rs 183 Crore, and 360 One Portfolio with Rs 200 Crore. Moreover, CDPQ Private Equity, WSSS Investments, Goldman Sachs, and Evolution Debt Capital collectively invested Rs 400 crores.

PharmEasy is striving to raise Rs 3,500 crore to repay its debt to Goldman Sachs, a move that follows the company’s default on loan terms during June 2023. Apart from financial changes, PharmEasy reported a 16% increase in revenue for FY23, reaching Rs 6,644 crore, although its net loss widened by 31% to Rs 5,212 crore. As a positive turn, PharmEasy announced that it turned profitable during the first half of FY24, gaining a cumulative EBITDA of Rs 60 crore for the tenure from April to September 2023. However, PharmEasy continues to face tough competition, notably losing a market-leading position to Tata Digital-backed 1mg.

In a significant move, the pharmacy major has successfully raised substantial funds as part of its ongoing rights issue. It is being executed at a 90% valuation cut compared to its peak valuation of $5.6 billion in October 20021. Leading the charge, MEMG Family Office has made a considerable investment of INR 800 crore, showcasing continued confidence in the startup’s potential apart from a sharp valuation dip. Moreover, 360 One, previously known as IIFL Ventures, channeled INR 200 crore through multiple funds, highlighting the diversified support the pharmacy is garnering from different investment avenues. Similarly, global investment giant Temasek demonstrated its belief in the company’s future prospects, contributing INR 183 crore. This series of investments underscores strong backing from existing and new investors, reflecting a collective optimism toward the startup’s resilience and potential for recovery.

The involvement of Canadian pension fund CDPQ, which invested INR 95 crore, marks a significant endorsement from international institutional investors, adding a layer of credibility and stability to the financial structure of the pharmacy major. Complementing such efforts, WSSS Investments, Goldman Sachs, and Evolution Debt Capital collectively injected INR 304 crore into the company. The combined investment from diverse financial entities amplifies the startup’s financial foundation and emphasizes the strategic importance of capital infusion in steering the company through challenging market conditions. 

Last Words

As the startup navigates through a transformation phase, fresh capital infusion is poised to play a significant role in driving operational efficiencies, enhancing technological capabilities, and expanding market reach. The strategic move aims to promote the company’s position in the highly competitive pharmacy sector, enabling it to promote growth opportunities and maintain leadership status. The collaborative support from a broad spectrum of investors underscores a shared vision of sustainable growth and innovation, setting the stage for a promising trajectory in the evolving digital healthcare landscape. Check out pharmeasy shares price
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