Parent company of PharmEasy raises debt capital
- ByStartupStory | November 9, 2022
Online pharmacy platform PharmEasy’s parent business, API Holdings Ltd, has raised an unknown sum in debt from growth-stage finance company EvolutionX Debt Capital.Nearly three months have passed since the e-pharmacy startup withdrew its IPO papers from the Securities and Exchange Board of India (Sebi) in August.
Invoking market conditions and strategic factors, PharmEasy postponed its IPO preparations. The company had stated at the time that it would instead conduct a rights offering to obtain capital from current shareholders.
Through its IPO, the company sought to raise Rs 6,250 crore. With the money, it intended to heavily prepay or reduce debt, support initiatives for organic growth, and finance inorganic expansion through acquisitions.
“This is a step in a planned series of capital offerings, which will be followed by a near-term infusion of equity in the company. According to Siddharth Shah, co-founder and CEO of API Holdings, “This collective capital raise will optimise the capital structure, as well as improve the net debt position and financial strength of the company, assuring a clear runway to profitability.”
As a division of Ascent Health, PharmEasy was established in 2015 by Dharmil Sheth and Dhaval Shah. The business provides consumers with diagnostic tests in addition to drug delivery.
Through a nationwide networked ecosystem, the company collaborates closely with pharmaceutical firms, distributors, pharmacies, hospitals, clinics, and diagnostic labs. More than 6 million individuals are reportedly transacting on it, together with over 150,000 active pharmacies and over 1,800 hospitals. Temasek and Prosus TPG are among its investors.
It is the first investment made by EvolutionX Debt Capital, which was founded in late 2021 by Temasek and DBS Bank, two state-owned holding companies in Singapore with a global presence in banking and finance.
EvolutionX intends to provide an alternate source of debt funding to help growth-stage technology businesses to scale more quickly and enter new markets by leveraging Temasek’s investment knowledge and DBS’ international banking networks.
In order to extend their financial runway and avoid obtaining equity capital at lower values, entrepreneurs and their shareholders are increasingly looking for less dilutive types of finance as capital markets remain subdued and access to private capital for tech start-ups becomes more limited. Rahul Shah, partner and co-head directing investments across India and Southeast Asia for EvolutionX, described the company’s investment philosophy as focusing on category-leading technology companies run by deserving entrepreneurs and supported by reputable investors.
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