IvyCap Gets 2X Returns On INR 21 Cr Pharmarack Bet After Acquisition

Mumbai-based venture capital firm IvyCap Ventures has announced the sale of its stake in business-to-business (B2B) healthtech platform Pharmarack at an internal rate of return (IRR) of 104%. The VC firm sold its stake in the acquisition deal for Pharmarack for INR 42 Cr ($5.5 Mn). after investing INR 21 Cr ($2.8 Mn at current conversion rate) in 2019.

IvyCap Ventures had also managed to get a massive 22X return from its investment in Purplle, after the beauty and lifestyle ecommerce platform raised $45 Mn from Sequoia Capital India, Verlinvest, Blume Ventures, and JSW Ventures in its Series D round. The VC firm had bought 30% stake in Purplle in 2015 for INR 15 Cr ($2 Mn, at current conversion rate) and sold it for INR 330 Cr ($45 Mn) in its Series D round.

The announcement comes after the confirmation of the acquisition of Pharmarack by ABCD Technologies (due to be renamed to IndoHealth Services). The acquisition was conducted through ABCD’s DigiHealth, a consortium which counts Alkem Laboratories, Cadila Healthcare, Cipla, Dr Reddy’s Laboratories, Lupin, Mankind Pharma, Sun Pharma Industries and Torrent Pharmaceuticals as members.

DigiHealth has agreed to acquire 100% ownership interest in Pharmarack Technologies in tranches. The upfront acquisition of 91.8% shareholding in Pharmarack for INR 111 Cr ($15 Mn) is expected to be completed within 30 days by purchase of shares from multiple existing shareholders in various lots. The remaining 8.2% of the shareholding in Pharmarack is likely to be acquired in multiple tranches over the next five years.

Pharmarack was founded by Pradyumn Singh, Kushal Bhandari, Anupam Sarawagi and Bhavik Parmar in 2015. Amit Backliwal joined as a cofounder in 2018. The startup offers a subscription-based SaaS solution and creates a network of pharma supply chain participants.

The company claims to be the ecosystem partner for pharmaceuticals and consumer health companies by helping them manage analytics, logistics, supply chain as well as financing, The company has more than 20 pharma companies as clients and other distributors, retailer, hospitals and public health enterprises.

The healthtech startup claims that their value chain covers more than 200K pharmacies, 5,000+ pharma distributors and 2,000 hospitals with its network spread across 1,000+ pin-codes all over the country.

“Efficient inventory management, value-chain engagement, particularly logistics enablement from order to billing make a company like Pharmarack an essential component of the industry. Pharmarack’s mission is to improve access to healthcare by driving availability and affordability in the market with its connected ecosystem – one in which all parts of the healthcare world seamlessly connect to networked data, information, knowledge, and processes in order to reduce costs, improve productivity, and deliver better care,” IvyCap Ventures’ founder and managing partner, Vikram Gupta said.

Pharmarack has raised $3.7 Mn (INR 27 Cr, at current conversion rate) in two funding rounds from four investors, including Unicorn India Ventures, Patni Group’s Currae Healthtech Fund and IvyCap Venture. It had last raised $3 Mn (INR 22 Cr, at current conversion rate) in its Series A back in 2019. It had raised $745K (INR 5.5 Cr, at current conversion rate) in Pre-Series A round back in September 2016.