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PharmEasy Secures $216 Million Investment Led by MEMG, Valuation Takes 90% Hit


PharmEasy, operated by API Holdings, has secured a substantial investment of $216 million, primarily led by Manipal Education and Medical Group (MEMG) along with existing investors. This infusion of funds, however, comes with a significant decrease in valuation, down by about 90% from its peak value.

The investment was facilitated through the issuance of cumulative convertible preference shares at Rs 96.8 each, totaling Rs 1,804 crore. MEMG contributed Rs 800 crore, while Prosus, Temasek, and 360 One Portfolios invested Rs 221 crore, Rs 183 crore, and Rs 200 crore, respectively. Additionally, CDPQ Private Equity, WSSS Investments, Goldman Sachs, and Evolution Debt Capital collectively invested Rs 400 crore.

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Following this, the preference shares will be converted into equity shares at a ratio of 1:20. Post-allotment, PharmEasy’s valuation is estimated to be approximately $710 million, marking a significant decrease from its previous valuation of $5.6 billion in 2021.

Recent challenges faced by PharmEasy include defaulting on loan terms with Goldman Sachs and a reduction in valuation by investors such as Janus Henderson and Neuberger Berman. Despite setbacks, the company witnessed a 16% growth in revenue and managed to reduce losses in the fiscal year ending March 2023.

PharmEasy’s journey, particularly after its acquisition of Thyrocare, has been arduous. However, the latest funding round provides a lifeline, ensuring the firm’s survival and possibly offering a chance for redemption. The expansion into diagnostics proved challenging, resulting in significant dilution of promoters’ stakes. Nonetheless, the company’s resilience highlights lessons for other startups, with the hope of a brighter future ahead.