Temasek Leads $220 Million Round In India’s Largest Fundraise By An E-Pharmacy Startup

The fundraise values the e-pharmacy startup at around $700 million.

Medicinal tablets are arranged for a photograph in Mumbai. (Photographer: Dhiraj Singh/Bloombergg)
Medicinal tablets are arranged for a photograph in Mumbai. (Photographer: Dhiraj Singh/Bloombergg)

PharmEasy has raised $220 million in a fresh funding round led by Temasek Holdings Pte, according to two people privy to the development, making it the largest fundraise by an online pharmacy startup in the country.

Caisse de dépôt et placement du Québec, the second-largest Canadian pension fund, LGT, the private banking and asset management group controlled by the Princely family of Liechtenstein, and South Korea’s KB Financial Group participated in the round, one of the persons cited earlier said requesting anonymity as the details aren’t public yet.

The new fundraise values the firm at around $700 million, the person said, making it the most valued online pharmacy startup in the country.

Founded by Dharmil Sheth, a second-time entrepreneur and former McKinsey consultant Dhaval Shah, the Mumbai-based startup allows customers to order medicines through its app. It works with distributors and retailers to provide medicines at customer’s doorstep. Besides, it also assists patients to get doctor consultations online.

The increased investor interest and customer adoption towards these platforms comes on the back of affordable smartphones and cheaper data after the entry of Reliance Jio Infocomm Ltd. E-pharmacy startups in the country have already raised nearly $286 million so far this year, as per data shared by Tracxn. The fresh fundraise by PharmEasy takes it to about $506 million.

To be sure, e-pharmacy startups cater to a tiny chunk of the country’s $55 billion pharmaceutical market.

But online pharmacies are poised to grow in the coming years. According to Frost & Sullivan, the e-pharmacy market in India, which is estimated to be around $512 million in 2018, is expected to grow at a compound annual growth rate of 63 percent to reach $3.6 billion by 2022.

The fresh investment in the startup also saw participation by existing investors including Bessemer Venture Partners, Orios Venture Partners, Eight Road, the proprietary investment arm of Fidelity International, and Nandan Nilekani-backed investment firm Fundamentum, the other person said, adding that PharmEasy has already received half of the investment, with other half coming in the next month.

PharmEasy, CDPQ, LGT are yet to respond to BloombergQuint’s email seeking comment on the fundraise.