Indian drug and medical services startup PharmEasy is in talks with investors for $200 million in funding at a valuation that could be 15% or even 25% less than last year’s $5.1 billion. Several of PharmEasy’s current investors are expected to contribute about $115 million to the planned fundraising, according to the first source involved in the discussions.
PharmEasy’s parent company, API Holdings, declined to comment on the fundraising effort. Thyrocare, a diagnostic testing company, is one of the companies owned by API.
In recent years, the company’s valuation has risen amid a boom in startups in India as a whole and sharp growth in its industry, whose competitors include Reliance’s Netmeds, Tata’s 1mg and Walmart’s Flipkart. PharmEasy’s “down round” deal, in which the company sells shares at a lower price than before, will be the first by a leading Indian company in recent memory.
Parent PharmEasy saw its total revenue more than double to $714 million in the fiscal year ending March 2022.
But total expenses for the period came in at $1.06 billion, partly due to one-time expenses on employee stock, according to a Reuters filing that included PharmEasy’s latest unaudited financial results.
Net loss for the year quadrupled to $334 million, according to the filing.
According to the first source, PharmEasy is now in a “wait and watch” position and is considering going public next year. A second source with knowledge of the situation added that the IPO may not happen before the end of 2023 and that PharmEasy’s parent company may have to resubmit regulatory IPO filings.