PharmEasy Biggest Underperformer In Prosus’ India Portfolio In H1 FY24

Online pharmacy major PharmEasy was the biggest underperformer in the Indian portfolio of investment giant Prosus during the first half (H1) of the financial year 2023-24 (FY24).

According to Prosus’ financial statements, PharmEasy had an internal rate of return (IRR) of -41% in H1 FY24. In fact, the online pharmacy major was the second-biggest underperformer in Prosus’ global portfolio, with only Skillsoft reporting a worse IRR during the period under review.

A shareholder presentation shared by Prosus revealed that it held a 13% stake in PharmEasy at the end of September 2023. It also showed that the investment giant increased its stake in the online pharmacy unicorn during the period under review. 

However, Prosus marked down PharmEasy’s valuation amid the startup’s financial troubles. 

“Another is a write down in PharmEasy of about $118 Mn and that’s really driven by the need for PharmEasy to raise money to settle debt. We actually participated in that round which expresses our confidence in the business going forward,” a Prosus spokesperson said.

The startup recently raised INR 3,500 Cr (around $424 Mn) in a rights issue, in which Prosus also participated. The rights issue was oversubscribed, according to PharmEasy cofounder Dhaval Shah.

PharmEasy was looking to settle a portion of its debt from the proceeds of the rights issue.

Beyond PharmEasy, edtech decacorn BYJU’S was another big underperformer for Prosus, having reported an IRR of -24% during the six month period ended September 2023.

Meanwhile, Prosus earned profitable returns from other Indian firms in its portfolio, including Swiggy, Eruditus, PayU India, Meesho and Elastic Run. Prosus reported a profitable IRR of 7% for Swiggy, and 22% for Eruditus. It also earned 30% positive returns from PayU India, 32% from Meesho, and 31% from Elastic Run in H1 FY24.

Overall, the investment major’s operating loss rose to $415 Mn in H1 FY24 from $329 Mn in the year-ago quarter. The company attributed the surge in loss to an impairment loss recognised with respect to edtech investments.

Earlier today, Prosus also slashed BYJU’S valuation down to under $3 Bn, more than 85% lower than the edtech giant’s peak valuation of $22 Bn it commanded during its last funding round.