Janus Henderson Further Cuts PharmEasy’s Valuation To $2.7 Bn

Janus Henderson Further Cuts PharmEasy’s Valuation To $2.7 Bn

SUMMARY

Janus Henderson has cut the online pharmacy’s valuation twice in two weeks, having first marked its valuation to about $2.8 Bn

The New York-based investment firm Neuberger Berman also trimmed the valuation of the epharmacy startup to $4.4 Bn recently

The markdown comes when PharmEasy has reportedly breached a loan covenant in its loan agreement with Goldman Sachs

Global asset management company (AMC) Janus Henderson has further marked down its stake valuation in Mumbai-based online pharmacy PharmEasy’s parent company API Holdings.

According to Janus Henderson’s regulatory filings with the US Securities and Exchange Commission (SEC), funds managed by the AMC marked the fair value of PharmEasy at $2.7 Bn, less than half of its $5.6 Bn valuation during the fundraise in October 2021.

Janus Henderson has cut the online pharmacy’s valuation twice in two weeks, having first marked its valuation to about $2.8 Bn as of December 31, 2022. The investor’s move also came days after the New York-based investment firm Neuberger Berman also trimmed the valuation of the epharmacy startup to $4.4 Bn

PharmEasy secured a valuation of $5.6 Bn when it closed its last funding round of nearly $350 Mn in October 2021, which saw investments from Singapore’s Amansa Capital, Blackstone-backed hedge fund ApaH Capital, Janus Henderson and others.

The fair value markdown comes at a difficult time for PharmEasy, as the online pharmacy has reportedly breached a loan covenant in its loan agreement with the US-based lender Goldman Sachs.

Turbulent Times For PharmEasy

Per the covenant, PharmEasy was supposed to raise an equity round of around INR 1,000 Cr ($120 Mn), associated with its burn rate. However, it has failed to raise the round after trying for a year and postponing its initial public offering (IPO).

The unicorn reportedly raised INR 2,280 Cr ($285 Mn) in debt from Goldman Sachs last August to pay off an earlier debt it had incurred to buy Thyrocare. The loan is said to be a five-year arrangement, attracting an annual interest rate of 17-18%.

PharmEasy hoped to pay off INR 2,000 Cr of its debt from the proposed IPO proceeds of INR 6,250 Cr. Having postponed its IPO plans to 2025, the epharmacy unicorn is looking to raise equity capital.

To be sure, it raised around INR 650 Cr in rights issue last year, and multiple sources close to the company cited by ET said PharmEasy does not have to raise a huge round, having reduced its burn rate significantly over the past few months.

During the year ended March 31, 2022, PharmEasy’s revenue from operations grew to INR 5,729 Cr from INR 2,235 Cr in FY21. Its losses were at INR 2,731 Cr in FY22 against INR 641 Cr in FY21.

A lot of Indian startups have seen their investors reduce the fair value of their stakes in them. The likes of BYJU’S, Ola, Gupshup, Meesho, Eruditus, Swiggy and Pine Labs have all witnessed valuation markdowns recently. 

However, these corrections do not permanently reduce a startup’s valuation. Investor markdowns have more to do with internal policies than the value of a startup. Valuations changes are linked with funding activity and unless a startup raises a down round, its valuation remains the same.

You have reached your limit of free stories
Become An Inc42 Plus Member

Become a Startup Insider in 2024 with Inc42 Plus. Join our exclusive community of 10,000+ founders, investors & operators and stay ahead in India’s startup & business economy.

2 YEAR PLAN
₹19999
₹7999
₹333/Month
Unlock 60% OFF
Cancel Anytime
1 YEAR PLAN
₹9999
₹4999
₹416/Month
Unlock 50% OFF
Cancel Anytime
Already A Member?
Discover Startups & Business Models

Unleash your potential by exploring unlimited articles, trackers, and playbooks. Identify the hottest startup deals, supercharge your innovation projects, and stay updated with expert curation.

Janus Henderson Further Cuts PharmEasy’s Valuation To $2.7 Bn-Inc42 Media
How-To’s on Starting & Scaling Up

Empower yourself with comprehensive playbooks, expert analysis, and invaluable insights. Learn to validate ideas, acquire customers, secure funding, and navigate the journey to startup success.

Janus Henderson Further Cuts PharmEasy’s Valuation To $2.7 Bn-Inc42 Media
Identify Trends & New Markets

Access 75+ in-depth reports on frontier industries. Gain exclusive market intelligence, understand market landscapes, and decode emerging trends to make informed decisions.

Janus Henderson Further Cuts PharmEasy’s Valuation To $2.7 Bn-Inc42 Media
Track & Decode the Investment Landscape

Stay ahead with startup and funding trackers. Analyse investment strategies, profile successful investors, and keep track of upcoming funds, accelerators, and more.

Janus Henderson Further Cuts PharmEasy’s Valuation To $2.7 Bn-Inc42 Media
Janus Henderson Further Cuts PharmEasy’s Valuation To $2.7 Bn-Inc42 Media
You’re in Good company