PharmEasy In Talks With Investors To Raise $200 Million At Lower Valuation: Report

PharmEasy, backed by big-name investors such as Prosus, TPG and Temasek, is in discussion to secure the new funds at a valuation as much as 15 per cent below last year's, a source said

PharmEasy’s planned fundraising is set to see participation from some existing investors, who have indicated they will commit about $115 million in the new round.

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PharmEasy, the drug and medical services start-up in India, is in talks with investors to raise $200 million, citing two sources news agency Reuters reported on Tuesday.

According to the report, the sources told Reuters that PharmEasy is eyeing a valuation that could be 15 per cent or even 25 per cent lower than last year’s $5.1 billion.

One source said PharmEasy, backed by big-name investors such as Prosus, TPG and Temasek, is in discussion to secure the new funds at a valuation as much as 15 per cent below last year's.

The second source said the company, which offers online medicine deliveries and diagnostic test services, has told its bankers to consider even a 25 per cent reduction if needed to close the deal.

That could cut PharmEasy's valuation for the new funding round to $3.8 billion, and the sources said an initial public offering (IPO) first targeted for 2022 has been delayed.

Start-ups in India have been jolted by uncertain global and domestic stock markets, and growing investor scepticism over what they say are sky-high valuations, making it difficult for PharmEasy to raise funds at same or a higher valuation, the sources said. They declined to be named as the talks on raising funds were private.

PharmEasy’s planned fundraising is set to see participation from some existing investors, who have indicated they will commit about $115 million in the new round, said the first source involved in the talks.

API Holdings, PharmEasy's parent firm which is looking to raise the funds, declined to comment. API owns other businesses, including diagnostic test provider Thyrocare.

Last year, Indian start-ups raised a record $35 billion in private funding and many internet companies went public. PharmEasy, too, cashed in on the boom raised a total of $1.89 billion since 2015, with most of it coming in the last two years, data from Pitchbook shows.