PharmEasy Likely To Raise $200 Mn At 15-25% Lower Valuation: Report

IPO-bound online pharmacy startup, PharmEasy is in discussions with investors to raise $200 Mn at a valuation lower by 15% to 25% as compared to its last year’s valuation of $5.1 Bn.  

Reuters quoted sources saying that PharmEasy has informed its bankers to consider a dip of 25% in its valuation if needed. With this, the new funding round will decline the online pharmacy startup’s valuation to $3.8 Bn.

Market volatility, low investor sentiments, and funding winter are credited as the prime reasons for PharmEasy carrying out a funding round at a lower valuation. 

In the previous month, PharmEasy also laid off about 40 employees from its subsidiary company Docon Technologies. Most of these sacked employees were working in the sales division and were based out of Indian cities such as Mumbai, Delhi, Jaipur, Chandigarh, among others. 

While, in the new fundraising, PharmEasy’s existing investors are likely to commit nearly $115 Mn. 

Earlier in May, the online pharmacy unicorn was said to be in discussions with private equity investors to raise debt up to $250 Mn in a bridge funding round.

As per a report, the Indian online pharmacy market, which was pegged at over $344 Mn in FY21, is likely to grow by 21-28% until 2027. Meanwhile, a report from Bernstein Research stated that PharmEasy accounted for a 50% market share in the online pharmacy segment that is likely to surge to $1 Bn by FY25.

In February, it also got SEBI’s nod to go ahead with its IPO launch. However, it delayed its IPO plans for the next year seeing the volatility in the Indian bourses and poor performance of new-age tech stocks. It was further mulling over readjusting its valuation. 

Of late, new-age tech stocks such as Zomato, Paytm, Nykaa, and Policybazaar have wiped out more than half of the investors’ wealth. 

According to Inc42 analysis, in the previous week ending 17th July, 11 new-age tech stocks closed with a cumulative market cap of about $32.48 Bn. Of this, Fino Finance had the lowest market cap with $0.25 Bn while beauty ecommerce unicorn Nykaa secured the highest market cap with $8.37 Bn.