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Tiger Global, B Capital Ready To Invest In IPO-Bound PharmEasy: Report

Tiger Global, B Capital Ready To Invest In IPO-Bound PharmEasy: Report

PharmEasy is planning to raise $40 Mn at a valuation of $1.8 Bn

B Capital will pick secondary shares worth $20 Mn from Everstone Capital

Meanwhile, PharmEasy is looking at a $500 Mn worth IPO by the end of 2021

Indian online pharmacy unicorn PharmEasy, which recently announced the merger with rival MedLife, is in talks with Tiger Global and Facebook cofounder Eduardo Saverin’s B Capital to raise $40 Mn funding at a valuation of $1.8 Bn. While Tiger Global is likely to pick up primary stake in PharmEasy, B Capital will pick up secondary shares worth $15-20 Mn from the company’s existing stakeholder Everstone Capital.

PharmEasy had raised $323 Mn in its Series E led by Prosus Ventures and TPG Growth, with participation from existing investors like Temasek, CDPQ, LFT Lightrock, Eight Roads and Think Investment, at a valuation of $1.5 Bn. This was the startup’s ticket into the unicorn club, making it the first epharmacy startup to do so. The above-mentioned investment firms hold about 80% stake in PharmEasy, with Prosus, TPG and Temasek alone owning about 30% stake cumulatively.

Overall, the company has raised $651 Mn to date across eight funding rounds.

The potential round, which was first reported by ET, comes at a time when the company is exploring options for its Initial Public Offering (IPO) towards the end of 2021. It plans to raise $400 Mn- $500 Mn (INR 3,000 Cr to INR 3,700 Cr) through this IPO, at a valuation of $3 Bn (INR 21,800 Cr). The share sale proposal will include both primary as well as secondary share components, where some of the early backers of the company will take a partial exit.

PharmEasy, founded in 2015 by Dharmil Sheth and Dhaval Shah, caters to the chronic care segment and offers a range of services such as teleconsultation, medicine deliveries and sample collections for diagnostic tests. The company also has a subscription-based service and operates on a full-stack model where it claims to procure medicines directly from manufacturers and deliver it to customers.

It connects over 60K brick-and-mortar pharmacies and 4K doctors in 16K zip codes across India, and also provides SaaS solutions for pharmacies to use in procurement combined with delivery and logistics support as well as credit solutions. It claims to have served over 20 Mn patients since inception. In the financial year 2020, the company doubled its revenue of INR 637 Cr compared to INR 240 Cr reported in FY19. PharmEasy’s losses before tax also doubled to INR 100.7 Cr from INR 50 Cr in the same time period, according to its unaudited financial statements.

PharmEasy announced this week the completion of its merger with Medlife, almost eight months after receiving approval from competition watchdog Competition Commission of India (CCI). This deal is said to be the largest consolidation deal in India’s online pharmacy sector, which now has companies like Reliance Retail, Amazon, Tata-backed 1mg, and others competing.

“This will make us the largest healthcare delivery platform across the country by a distance — serving more than two million families every single month,” Dhaval Shah, cofounder of PharmEasy, wrote on LinkedIn announcing the merger. With this acquisition, Medlife would discontinue its operations and would be merged into PharmEasy’s platform from May 25 onwards. PharmEasy will also absorb Medlife’s current customer base.