PharmEasy in Talks to Raise $300 Million in Funding Round, Valuation Takes a Hit

• ByStartupStory     |    July 5, 2023

The well-known Indian pharmacy startup, PharmEasy, is reportedly in discussions to raise approximately $300 million in a new funding round. However, this time at a significantly lowered valuation. Many sources familiar with the matter have enclosed that the company’s existing investors are aware of the fundraising plans, which come amid pressure from some backers for PharmEasy to explore a potential sale. 

The funds raised in this round will primarily be leveraged to repay a debt owed to Goldman Sachs, a global investment banking group, that provided the startup with a loan of around $285 million last year. This financing enabled PharmEasy to acquire a majority stake in Thyrocare for over $600 million.

According to various reports by Economic Times and Moneycontrol, Manipal, a prominent healthcare group, is expected to lead the $300 million funding round for the startup. Meanwhile, several investors backing PharmEasy have been advocating for the sale of the business for some time now. API Holdings, the parent company of PharmEasy, achieved a valuation of $5.6 billion in its most recent funding round conducted during the second half of 2021.

Internal documents cited by the Economic Times suggest that PharmEasy intends to raise the new financing through a rights issue, with the share price being reduced to 5 Indian rupees from the previous 50 rupees. If the funding round materializes under these terms, PharmEasy’s valuation is estimated to plummet to approximately $500 million from $600 million. This would mark a crucial decline from its prior valuations. 

The company has struggled to secure a new funding round for several quarters, but to no avail. Despite having a valuation of $2 billion, the company has reportedly struggled to find interested investors. Presently, the startup has not responded to inquiries regarding these recent developments. 

Notable backers of PharmEasy include TPG, Prosus, Temasek, B Capital, Bessemer Venture Partners, Eight Roads Ventures, Steadview Capital, and JM Financial.

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