PharmEasy, a major player in the online pharmacy segment, has received INR 1,804 Cr (USD 216 million) from the deal. Manipal Education and Medical Group (MEMG), led by Ranjan Pai, along with other shareholders who had invested in the past, launched these fundraising campaigns, which were crucial for the troubled company struggling with the company’s valuation.
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Valuation Setback
PharmEasy faced a valuation markdown of almost 90% in this funding round. This adjustment pegs the company’s current valuation at USD 710 million, a sharp contrast to its USD 5.6 billion valuation in 2021.
Investment Contributors
Key participants in PharmEasy’s latest funding effort included the family office of MEMG, which contributed a substantial INR 800 Cr. Additionally, Prosus, Temasek and 360 One Portfolio invested INR 221 Cr, INR 183 Cr and INR 200 Cr respectively. Significant contributions also came from CDPQ Private Equity, WSSS Investments, Goldman Sachs and Evolution Debt Capital, totalling INR 400 Cr.
Debt Repayment and Prior Challenges
According to Entrackr’s report, PharmEasy’s fundraising efforts have been focused on raising INR 3,500 Cr since August 2023, primarily to repay the debt to Goldman Sachs. The company’s financial difficulties were further highlighted in June 2023, when it defaulted on loan terms with the bank. PharmEasy also faced a series of valuation downgrades, with Janus Henderson being the first to reduce the company’s valuation by nearly 50%, followed by Neuberger Berman by 21.4% in February 2023.
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Background and IPO Plans
Founded in 2015 by Dharmil Sheth, Dhawal Shah, Harsh Parekh, Siddharth Shah and Hardik Dedhia, PharmEasy initially planned an initial public offering (IPO). However, the company postponed its IPO aspirations after filing a draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) in November 2021. The decision to withdraw its listing plan in August 2022 was attributed to challenging market conditions.
