Temasek’s EvolutionX Debt Capital Backs PharmEasy

PharmEasy’s parent company API Holdings has secured debt funding from debt financing platform EvolutionX Debt Capital.

PharmEasy will use funds to optimise its capital structure and strengthen the financial structure of the company. The current fundraising will be followed by equity investment that would take place in the coming term, Siddharth Shah, CEO and cofounder of API Holdings, told Business Standard. 

Inc42 has reached out to PharmEasy on the fundraising development. The report will be updated with the company’s responses. 

The development came almost a month after PharmEasy reportedly initiated its rights issue to secure up to INR 750 Cr via convertible notes. Besides, its existing investors including Prosus Ventures, Temasek and the founders will also subscribe to the rights issue thereby, picking shares worth INR 200 Cr.

Set up in 2015 by Dharmil Sheth and Dhaval Shah, PharmEasy is an online healthtech startup. The mobile and desktop-enabled platform offers various services including medicine deliveries, online ecommerce platform and sample collections.

In June, Inc42 reported that PharmEasy’s subsidiary Docon Technologies sacked 40 employees working across different Indian cities including Mumbai, Delhi, Jaipur, Chandigarh, among others. 

Earlier this year, PharmEasy received SEBI’s nod to go for worth INR 6,250 Cr public listing. However, it halted its plans after seeing new-age startups including Nykaa, Policybazaar and Paytm, among others getting battered on the Indian bourses. 

During that time frame, there were multiple reports about the epharmacy startup looking to slash its IPO valuation only to list on the Indian stock market. 

“Capital markets are muted and access to private capital for tech start-ups is narrowing, so founders and shareholders are seeking less dilutive forms of capital to extend their cash runway and avoid raising equity capital at lower valuations,” said Rahul Shah, partner and co-head leading investments in India and Southeast Asia at EvolutionX.

EvolutionX, which is founded by DBS and Temasek, aims to invest between $20 Mn and $50 Mn in growth-stage tech startups in Asia, focusing particularly in India, China and Southeast Asian countries. It will back startups working in consumer, education, financial services, healthcare, logistics, and industrial development. 

The current debt funding has happened when Indian startups are grappling for survival. Impending economic depression in the US market, global disruption, and negative investor sentiment are some of the challenges looming over the startup ecosystem currently. 

According to an Inc42 report, Indian startups concertedly secured $3 Bn in the fourth quarter of 2022. With this, the funding activities in Q4 2022 declined by 50% as compared to the previous  quarter.