PharmEasy raises $216M amid 90% valuation drop

Api Holdings Limited, the parent company of online pharmacy startup Pharmeasy, has raised $216 million in a funding round led by Manipal Education and Medical Group (MEMG) and other existing investors.

According to Entrackr, the new funding has resulted in the company's valuation having fallen by 90% since it peaked. 

Family office MEMG led the round with Rs 800 crore, while Prosus invested Rs 221 crore, 360 One (formerly IIFL Ventures) invested Rs 200 crore through various funds, while Temasek invested Rs 183 crore, the report said. 

CDPQ Private Equity, WSSS Investments, Goldman Sachs, and Evolution Debt Capital collectively invested Rs 400 crore in the latest round.

API Holdings' board has approved a special resolution to allot 18,63,74,897 cumulative convertible preference shares at an issue price of Rs 96.8 each, raising Rs 1,804 crore, as per regulatory filing.

The company plans to convert the CCPS shares into equity shares on a 1:20 basis.

The firm is looking to raise Rs 3,500 crore since August last year to repay debt from Goldman Sachs. It defaulted on loan terms in June, leading to a 50% reduction in valuation by investor Janus Henderson and a 21.4% reduction by Neuberger Berman Group to $4.4 billion as of February 2023.

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The investment comes just a month after the CCI approved the proposal of MEMG family office and 360 One to invest in API Holdings.

PharmEasy, founded in 2015 by Dharmil Sheth, Dhaval Shah, Harsh Parekh, Siddharth Shah, and Hardik Dedhia, sells medicines online and provides diagnostic tests through its other brands.

The Mumbai-based startup reported a 16% increase in revenue for FY23, reaching Rs 6,643.9 crore, compared to Rs 5,728.8 crore a year ago. However, the company's loss increased by 30% to Rs 5,211.7 crore in the financial year ended March 2023.