Facebook cofounder Eduardo Saverin’s B Capital and New York-based investment major Tiger Global are in advanced negotiations to pick up stake in e-pharmacy PharmEasy, three people aware of the matter said.
The proposed deal is expected to value the Mumbai-based e-pharmacy’s parent, API Holdings, at about $1.8 billion, up from the $1.5 billion valuation that it snagged in April to join India’s fast-growing pool of unicorns — startups valued at $1 billion or more.
That $350-million round was led by Prosus Ventures, formerly Naspers, and US-based private equity major TPG Growth.
Tiger Global is likely to pump in primary capital in PharmEasy, while B Capital may pick up secondary shares, according to people in the know, as one of its early investors, Everstone Capital, looks to divest a part of its holding in the online pharmacy. Total size of the transaction could be about $40 million, they said.
“Everstone is looking to sell parts of its holding and B Capital is likely to pick that, though (Everstone) had also spoken to few others as well,” according to one person cited above.
“B Capital is investing about $15-20 million,” said the person cited earlier.
PharmEasy cofounder Dhaval Shah declined to comment. Emails sent to B Capital and Everstone Capital did not elicit any response till press time on Friday. Tiger Global declined to comment.
“It (PharmEasy) is currently focusing on secondary investments to give some exit to early investors,” another person aware of the company’s thinking said. “It is also exploring the possibility of launching an initial public offering but will wait to see how Zomato’s IPO plays out. If that goes well, they might expedite IPO plans.”
Foodtech platform Zomato filed its draft red herring prospectus proposing an offering of ₹8,250 crore with India’s markets regulator earlier this month.
ET has reported that PharmEasy is eyeing an initial public listing at a valuation of $3 billion.
India’s largest e-pharmacy
PharmEasy, is now clocking around Rs 300 crore in monthly sales, boosted by the acquisition of smaller rival Medlife this week, making it the country’s largest epharmacy platform. It expects to begin offering vaccine bookings through its platform next month — for both consumers and corporates.
The seven-year-old startup is now the only standalone online pharmacy after a sustained wave of consolidation in the fast-growing sector, which began with Reliance Industries (RIL) buying around 60% in Netmeds. The Tata group is now in the final stages of closing a majority stake acquisition in 1mg, while online retail giant Amazon has also forayed into the space by delivering medicines only in Bengaluru, for now.
PharmEasy is looking to scale up its operations and widen its reach to battle these large conglomerates. The Mumbai-based firm plans to expand its base of pharmacies to 120,000 in the next year, up from around 80,000 currently. Over the next two years, it plans to have a network of over 200,000 such pharmacies servicing orders across 100 cities in India.
The e-pharma sector is among those to benefit from increased adoption of digital commerce during the pandemic. Industry reports estimate that about six million new households have tried online purchase of medicines in the past year, taking total user base to about nine million. The second wave of the pandemic is expected to further increase this user base.
Typically, e-pharmacies derive a bulk of their revenue from selling prescription medicines to chronic patients but are now expanding by offering services such as online doctor consultations and diagnostic services.
