PharmEasy Plans to Raise New Funding via Rights Issue at 90% Discount
Indian online pharmacy startup PharmEasy has informed its existing investors that it plans to raise a new round of funding via a rights issue at a significant discount to its previous valuation, according to a person familiar with the case.
This move comes as PharmEasy races to secure the necessary capital to pay off its lender, Goldman Sachs. The company’s intention to raise new financing was first reported by the Indian newspaper Economic Times.
Valuation and Services Offered
API Holdings, the parent company of PharmEasy, achieved a valuation of over $5 billion in its most recent funding round in the second half of 2021. PharmEasy offers a wide range of services including wellness tools and information, consultations, diagnostic tests and radiology, and treatment delivery.
Postponed IPO Plans
In November 2021, PharmEasy requested an initial public offering of $843 million. However, the company later decided to postpone its IPO plans.
This decision likely contributed to the startup’s current need for new financing. The proposed rights issue would value PharmEasy’s share price at Indian rupees 5, a significant decrease from the previous value of 50, according to internal documents cited by the Economic Times.
Impact on Valuation
If the rights issue goes through, PharmEasy’s valuation would drop to around $500 million to $600 million. This decline in valuation would position PharmEasy as the first major Indian unicorn to experience a decrease in valuation.
Since the company’s inception, PharmEasy has raised over $1.1 billion against equity and debt. However, finding a buyer with a valuation of even $2 billion has proven challenging, as reported by TechCrunch.
Manipal Group’s Potential Investment
Separately, healthcare group Manipal is considering an investment of approximately $121.6 million in PharmEasy, which would result in an 18% stake in the Indian startup, according to money control.
This potential investment further highlights the interest and confidence that investors have in the future success of PharmEasy and the online pharmacy sector as a whole.
Conclusion
PharmEasy’s plan to raise new funding through a rights issue at a significant discount to its previous valuation reflects the startup’s immediate need to pay off its lender and bolster its financial position.
With its wide range of services and its impressive valuation in its most recent funding round, PharmEasy is a key player in the Indian online pharmacy space. However, the company faces challenges in finding buyers with high valuations, as evidenced by its current difficulties in raising a new round of funding.
Nevertheless, the potential investment from Manipal Group indicates that there is still significant interest in PharmEasy and its potential for future growth and success.
Summary
PharmEasy, an Indian online pharmacy startup, plans to raise new funding through a rights issue at a 90% discount to its previous valuation. The company aims to secure the capital necessary to repay its lender, Goldman Sachs. PharmEasy’s parent company, API Holdings, achieved a valuation of over $5 billion in its most recent funding round. Despite the postponed IPO plans, the startup continues to offer a range of services including wellness tools, consultations, diagnostic tests, and treatment delivery. If the rights issue proceeds, PharmEasy’s valuation would drop to around $500 million to $600 million, making it the first major Indian unicorn to experience a decrease in valuation. However, interest from investors like Manipal Group indicates confidence in PharmEasy’s future potential.
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Indian online pharmacy startup PharmEasy has informed its existing investors that it plans to raise a new round of funding via rights issue at a 90% discount to previous valuation, a person familiar with the case said. affair.
PharmEasy, one of India’s largest pharmaceutical firms, is racing to raise the new capital to pay off its lender Goldman Sachs, the person said. Indian newspaper Economic Times first reported the development.
API Holdings, the parent company of PharmEasy, was valued at more than $5 billion in its most recent funding round in the second half of 2021.
The firm, which offers a range of services including wellness tools and information, consultations, diagnostic tests and radiology, and treatment delivery, requested an initial public offering of $843 million in November 2021 but later postponed the plan.
The startup plans to raise new financing through a rights issue that would value its share price at Indian rupees 5, down from 50 previously, the newspaper reported, citing internal documents.
Under the proposed terms, if the round goes through, PharmEasy will see its valuation drop to around $500 million to $600 million. The startup has raised in total more than $1.1 billion against equity and debt. He will also become the first great Indian unicorn to lift a round down.
PharmEasy has been looking to raise a new round for several quarters, but has had trouble finding a buyer with a valuation of even $2 billion, TechCrunch previously reported. The company did not respond.
The firm counts TPG, Prosus, Temasek, B Capital, Bessemer Venture Partners, Eight Roads Ventures, Steadview Capital and JM Financial among its sponsors.
money control reported Separately, healthcare group Manipal is looking to invest around $121.6 million in PharmEasy for an 18% stake in the Indian startup.
PharmEasy, once valued at over $5 billion, seeks new funding at a 90% valuation cut
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