PharmEasy raises INR 1804 Cr at 90% lower valuation in Rights Issue

PharmEasy, a leading digital pharmacy, recently secured INR 1,804 Cr ($216.2 Mn) in funding led by the Manipal Group chairman Ranjan Pai's family office, following the Competition Commission of India's approval of its INR 3,500 Cr rights issue. This financing round involved issuing cumulative convertible preference shares B (CCPS B) at a reduced valuation compared to its peak valuation of $5.6 Bn in October 2021.

Notable investors included the MEMG Family Office, Prosus, 360 One (formerly IIFL Ventures), Temasek, Canadian pension fund CDPQ, WSSS Investments, Goldman Sachs, and Evolution Debt Capital. PharmEasy intends to convert the CCPS into equity shares at a ratio of 1:20.

This capital infusion aims to address PharmEasy's outstanding debt to Goldman Sachs, stemming from its failure to meet loan covenant conditions. Established in 2015, PharmEasy has grappled with valuation markdowns, funding constraints, and layoffs. Nonetheless, recent restructuring efforts have yielded positive results, with the company reducing losses and boosting operating revenue in FY23.

Despite encountering obstacles, PharmEasy remains a prominent player in the digital pharmacy realm, offering online medicine sales and diagnostic tests. This latest funding round underscores its strategic approach to fortifying its market position and navigating the ongoing challenges in the healthcare sector.