PharmEasy’s Sales Cross INR 6,000 Cr Mark In FY23, Posts INR 5,211 Cr Loss

Epharmacy startup PharmEasy saw its operating revenue cross the INR 6,000 Cr mark in the financial year ended March 31, 2023. The Mumbai-based unicorn reported an operating revenue of INR 6,643.9 Cr in the financial year 2022-23 (FY23), a jump of 16% from INR 5,728.8 Cr in the previous fiscal year.

Founded in 2015 by Dharmil Sheth, Dhaval Shah, Harsh Parekh, Siddharth Shah, and Hardik Dedhia, PharmEasy sells medicines online and also offers diagnostic tests through its subsidiaries. 

The startup primarily earns revenue through sales of medicines via its marketplace. In FY23, the startup generated a revenue of INR 5,925.3 Cr through the sale of pharmaceutical and cosmetic products, while earning INR 701.2 Cr through diagnostic and other services. In FY22, it had earned INR 5,229.9 Cr by selling medicines, while the revenue from diagnostic and other services stood at INR 417.8 Cr.

Including other income, the startup’s total revenue stood at INR 6,699.7 Cr, an increase of 15% from INR 5,781 Cr in the previous fiscal year. 

However, net loss increased over 31% to INR 5,211.7 Cr in FY23 from INR 3,992.4 Cr in FY22 due to an impairment loss of INR 2,921.9 Cr during the year under review. Excluding the impairment loss, PharmEasy’s net loss declined 16% to INR 2,289.8 Cr during the year under review from INR 2,731.7 Cr in FY22. 

Where Did PharmEasy Spend?

The startup’s total expenditure increased a mere 6% to INR 8,974 Cr from INR 8,491.5 Cr  in FY22. 

Procurement Cost: It accounted for about 63% of the total expenditure. PharmEasy’s procurement cost rose 12% to INR 5,730.8 Cr in FY23 from INR 5,113 Cr in the previous year. 

Employee Benefit Expenses: The startup managed to slash its employee cost by 12% to INR 1,283.3 Cr in FY23 from INR 1,458.9 Cr in the previous fiscal year. It is pertinent to note that the startup undertook multiple rounds of layoffs in 2022 and 2023. 

Marketing Cost: In a bid to cap its expenditure, the startup brought down its marketing cost by over 50% to INR 235 Cr in FY23 from INR 494 Cr in FY22. 

PharmEasy, which shelved its IPO plans in 2022, was facing a severe cash crunch last year. However, it recently managed to raise INR 3,500 Cr (around $424 Mn) in a rights issue. 

The startup said it would settle a portion of its debt from the proceeds of the rights issue.

PharmEasy, like edtech startup BYJU’S, has been trying to repay the debt it raised from Goldman Sachs. Earlier, the startup breached its loan covenant terms with Goldman Sachs within a year after raising the high-cost debt.

As per the loan terms, the startup was expected to raise an equity round of around INR 1,000 Cr ($120 Mn) but failed to do so. The company had raised the debt to pay off a previous debt that it took to buy Thyrocare.

Amidst all these, PharmEasy last year appointed Yatharth Bhargova as the new group CFO of its parent entity API Holdings Private Limited. PharmEasy has raised capital of about $1 Bn till date and counts the likes of B Capital, Temasek, Eight Roads Ventures, Prosus, and Bessemer Venture Partners among its backers. It competes with the likes of Tata 1mg, MediBuddy and Practo in the online pharmacy market.