PharmEasy may go for raising $200 million, even at a lower valuation

19 Jul 2022 , 03:32 PM

PharmEasy, an Indian startup providing pharmaceutical and medical services, is in talks with investors to raise $200 million, but at a valuation that could be as much as 15% or 25% less than the $5.1 billion it received last year, according to two people with direct knowledge of the discussions who spoke to Reuters.

According to the first person participating in the discussions, several current investors in PharmEasy are expected to contribute roughly $115 million to the proposed capital raising.

In an effort to generate 62.5 billion rupees ($782 million) from an initial public offering (IPO) in 2022, API Holdings last year filed a prospectus, betting on rising healthcare costs and an increase in the popularity of online ordering. Sources verified that the plan has been postponed.

Investors' rising losses at the digital pharmacy are one thing on their minds before the market opens, according to the sources. The parent company of PharmEasy experienced a more than doubling of its overall revenue to $714 million in the fiscal year ending March 2022.

However, overall spending for the time period came to $1.06 billion, in part because of a one-time charge for employee stock perks, according to a document seen by Reuters that included the most recent unaudited financials for PharmEasy.

According to the record, the net loss for the year increased fourfold to $334 million. As per the first source, PharmEasy is now in a "wait and watch" posture and considering going public next year. A third source with knowledge of the situation added that PharmEasy's parent could need to resubmit the IPO regulatory paperwork and the IPO may only happen in the latter half of 2023.

The delay in the IPO comes as shares of notable Indian offerings from the previous year, such as the food delivery company Zomato and the digital payments company Paytm, have lost more than 60% of their value since their peaks.