PharmEasy Raises Rs 1,800 Crore At 90% Valuation Cut

API Holdings Pvt., the owner of PharmEasy, has raised about Rs 1,800 crore at a 90% slash from its peak valuation of about Rs 46,000 crore, or $5.6 billion.

The struggling e-pharmacy has raised Rs 1,804 crore, or $216 million, led by billionaire Ranjan Pai's Manipal Education and Medical Group and existing investors, according to filings with the Registrar of Companies and accessed via TheKredible.

The development was first reported by Entrackr.

The board of API Holdings passed a special resolution to allot 18.6 crore cumulative convertible preference shares at an issue price of Rs 96.8 each, totalling Rs 1,804 crore.

The valuation for this funding round comes at roughly Rs 6,000 crore ($710 million), or a 90% slash from its $5.6 billion tag in October 2021, when business was booming and the sentiment was at an all-time high for tech-led startups during the Covid-19 pandemic.

Pai's family office led the round, pumping in Rs 800 crore, while Prosus, Temasek, CDPQ Private Equity, Goldman Sachs, and Evolution Debt Capital also participated.

The e-pharmacy's expanding losses and minimal revenue growth in FY23 are the reasons for the valuation cut. It posted Rs 6,644 crore in consolidated revenue from operations in FY23, up roughly 16% from Rs 5,728.8 crore in the previous fiscal. The company's loss widened to Rs 5,211.7 crore from Rs 3,992.4 crore in FY22, according to financial statements on the company's website.

In FY23, the company booked exceptional items worth Rs 2,922 crore, including impairment of goodwill and investments, which caused losses to expand. In FY22, it had booked a loss of Rs 1,261 crore in the same segment.

Janus Henderson, a U.S.-based investor, slashed PharmEasy's valuation by 50% to $2.8 billion in May 2023 from its $5.6 billion worth, as per its last funding round of $350 million in October 2021. Another US investor, Neuberger Berman, cut PharmEasy's valuation by 21% to $4.4 billion as of February 2023.