PharmEasy Secures $216 Million in Funding Despite Significant Valuation Decline

PharmEasy‘s parent company, Api Holdings Limited, has successfully raised $216 million in a new funding round amid a sharp 90% drop in its valuation from its peak, according to a report by Entrackr. The round was led by Manipal Education and Medical Group (MEMG), with significant contributions from existing investors.

The latest investment round was spearheaded by the MEMG family office, which contributed Rs 800 crore. Other notable investments included Rs 221 crore from Prosus, Rs 200 crore from 360 One (formerly IIFL Ventures), and Rs 183 crore from Temasek. Additional funds totaling Rs 400 crore came from CDPQ Private Equity, WSSS Investments, Goldman Sachs, and Evolution Debt Capital.

In response to the successful fundraising, API Holdings’ board has approved the allotment of 18,63,74,897 cumulative convertible preference shares at an issue price of Rs 96.8 each, totaling Rs 1,804 crore. This move is part of a broader strategy by the firm to convert these shares into equity on a 1:20 basis and to raise Rs 3,500 crore since August of the previous year primarily to repay outstanding debt to Goldman Sachs.

The funding announcement comes shortly after the Competition Commission of India (CCI) approved the investment proposal from the MEMG family office and 360 One in API Holdings. This approval is a crucial step forward for PharmEasy as it seeks to stabilize its financial footing following a default on loan terms in June, which significantly impacted its valuation.

Despite the financial challenges, PharmEasy has reported a 16% increase in revenue for the fiscal year ending March 2023, with earnings reaching Rs 6,643.9 crore, up from Rs 5,728.8 crore the previous year. However, the company’s losses widened by 30%, totaling Rs 5,211.7 crore for the same period.

Founded in 2015 by Dharmil Sheth, Dhaval Shah, Harsh Parekh, Siddharth Shah, and Hardik Dedhia, PharmEasy has grown into a leading online pharmacy and healthcare platform in India, offering not only medicines but also diagnostic tests through its associated brands.