Online drugstore PharmEasy marshals US$350 million in pre-IPO investment round

INDIA- PharmEasy, an online drugstore chain, has reportedly raised nearly US$350 million in its most recent round of funding ahead of filing its draft red herring prospectus (DRHP) before an initial public offering (IPO).

According to an Economic Times report based on the company’s regulatory documents, the round included both primary and secondary financing.

PharmEasy’s parent company API Holdings raised approximately US$200 million (Rs 1,505 crore) from 15 high-profile investors, including Amansa Investments, Steadview, SARV Investments, and Neuberger Berman Emerging Markets Equity Funds.

Siddharth Shah, Dhaval Shah, Dhramil Sheth, Harsh Parekh, and Hardik Dedhia, the founders of PharmEasy, have received new stock options ahead of the online pharmacy’s IPO.

Under the company’s employee stock ownership plan, each founder received 9,987 stock options.

In 2019, Dharmil Sheth and Dr. Dhaval Shah founded PharmEasy, which merged with its investor firm, Ascent Health, to form API Holdings.

The online pharmacy startup specializes in chronic care and offers a variety of services such as teleconsultation, medication delivery, and sample collection for diagnostic tests.

PharmEasy was the first Indian e-pharmacy startup to achieve unicorn status. After raising $323 million in a Series E funding round from Prosus Ventures, TPG Growth, and the company’s existing investors, the startup will join the prestigious club in the second week of April 2021.

Earlier this year, PharmEasy purchased publicly traded Thyrocare, a chain of diagnostic and preventive care laboratories.

API Holding was able to go public as a result of the acquisition. According to media reports, PharmEasy’s initial public offering (IPO) aims to raise US$1.2 billion.

The founders of PharmEasy have also purchased shares worth approximately US$40 million in the secondary sale.

In addition to their primary investment, the aforementioned investors have acquired secondary shares.

This is the company’s third major financing round, bringing the total amount raised in the calendar year to US$1 billion, including secondary funding, amid record amounts of capital being pumped into startups leading the digital economy.

It has made three acquisitions this year. Following the acquisition of its rival Medlife in May, it purchased the publicly traded diagnostic chain Thyrocare for US$600 million in June.

It also acquired Aknamed, a cloud-based hospital supply chain management startup, for a reported US$133 million (Rs.1,000 crore).

It has also been reported that the company is on the verge of acquiring a majority stake in Marg ERP Ltd, a pharma-focused inventory and accounting software firm.

Within five months, the pre-IPO round will increase the company’s valuation by nearly 40%, from US$4 billion to US$5.6 billion.

PharmEasy appointed five new independent directors to its board last month and received board approval to transition from a privately held to a publicly traded company.

Both of these are standard procedures for a startup to follow prior to filing its DRHP. PharmEasy is due to go public in March 2022.

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