PharmEasy Story: From Billion-Dollar Unicorn to Million-Dollar Valuation
pharmeasy
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The medicine industry has always been as disorganized as we can imagine. Though we were all pleasantly happy with the wholesale and retail market structure that the pharmaceutical industry has offered its customers, the digitalization of the same was evident. Thus, it happened.
With the digitalization of the medical industry, we can now order our medicines from a wide range of eCommerce medical stores online and get them delivered online without any hassles. One of the major players that makes online ordering of medicines easy is PharmEasy.
PharmEasy has developed a healthcare delivery platform to simplify and modernize the healthcare setup in India. The platform helps patients to stay connected with various local pharmacy stores and outlets. Data and technology are the driving factors behind a robust health and well-being ecosystem today and PharmEasy is leveraging both of them to strengthen healthcare in India.
If you are wondering "What does PharmEasy do?" then PharmEasy serves as an online pharmacy and handles the hassle-free delivery of medicines and other medical equipment. PharmEasy operates in several major cities in India. Shopping for medicines online has thus, become convenient and easy through PharmEasy. The company delivers medicine and other medical equipment to thousands of customers every day.
Recently, API Holdings, the parent company of PharmEasy, had its valuation reduced to $458 million in September 2024. This is a big drop of around 92% from its previous highest valuation of $5.6 billion in 2021. One of its investors, Janus Henderson lowered the value of its investment in PharmEasy by 91.8%.
Read on to find out more about PharmEasy's success story, founders and owners, net worth, business model, growth, competitors, revenue model, funding details, and acquisitions.
PharmEasy - Company Highlights
| Startup Name | PharmEasy |
|---|---|
| Headquarters | Lal Bahadur Shastri Marg, Mumbai, India |
| Founder/Owner | Dharmil Sheth, Dr. Dhaval Shah |
| Founded | 2014 |
| Net Worth/Valuation | $458 million (November 2024) |
| Parent Organization | 91streets Media Technologies/API Holdings Private Limited |
| Website | pharmeasy.in |
PharmEasy - About And How It Works?
PharmEasy - Industry
PharmEasy - Founders and Team
PharmEasy - Startup Story
PharmEasy - Name, Tagline and Logo
PharmEasy - Business Model
PharmEasy - Revenue Model
PharmEasy - Funding and Investors
PharmEasy - ESOPs
PharmEasy - Acquisitions
PharmEasy - Challenges Faced
PharmEasy - Customer Acquisition
PharmEasy - Partnerships
PharmEasy - Competitors
PharmEasy - Growth and Revenue
PharmEasy - Future Plans
PharmEasy - About And How It Works?
Pharmacy is an e-commerce platform for the purchase of medicines and other healthcare-related equipment. Whenever one uploads a prescription on PharmEasy, it is then sent to a drugstore in their vicinity. The company uses a mobile app and web technology to offer the best quality healthcare products and essentials to its customers at affordable rates.
You might be thinking, "Ah! discounted products, they would be of cheap quality for sure." But no, a discount has nothing to do with compromise in terms of quality. The pharmacy provides top-notch products at par with the quality that you can find in reputed pharmacies and medical stores.
Once PharmEasy sends your medical prescription to the drugstore, a delivery agent collects the medicines from the drugstore while adhering to all sorts of precautions and guidelines. Your order is then packaged and eventually delivered to your doorstep.
PharmEasy - Industry
Along with all the industries of now, the medicine/healthcare industry has also been witnessing decent growth empowered by the penetration of new-age technologies and the internet. Internet users have already grown at a CAGR of 18.17% between 2015 and 2019 and are further expected to rise at a CAGR of 9.3% till 2028. Besides, the e-commerce transactions also increased by 26.2% in 2023.
The market of Indian e-pharmacies is predicted by a leading consulting firm to grow greater than 7X times between 2019 and 2023. It reached a total value of $394.09 million in 2024 and is expected to rise to $801.34 million by 2030, at a CAGR of 12.62%, which is fascinating, to say the least.
PharmEasy - Founders and Team
Dharmil Sheth and Dr. Dhaval Shah are the founders of PharmEasy.
Dharmil Sheth
Dharmil is the Co-founder of PharmEasy along with being the Co-founder of API Holdings. He is also the founder and president of Ekagrata. Sheth also founded 91streets before founding PharmEasy. Dharmil is an Electronics Engineer with a Btech degree, after which he obtained an MBA in Marketing from IIM Ghaziabad. Techno Gravity Solutions and MakeMyTrip.com were among the first companies that Dharmil Sheth worked with in Business Development and as a Summer Intern respectively.
Dr. Dhaval Shah
Dr. Dhaval Shah has an MBBS from Rajiv Gandhi Government Medical College, after which he pursued an MBA from XLRI Jamshedpur. Shah has been the General Secretary at both of his colleges. He eventually became a Consultant at McKinsey & Company and then founded PharmEasy and API Holdings.
The team behind PharmEasy has set its sights on becoming India's best healthcare delivery venture. The focus at the moment is digitization to the maximum possible extent. PharmEasy is a private company that is adding new employees to its task force every other day.
PharmEasy - Startup Story
Dharmil Sheth, the founder of PharmEasy, and his doctor pal, Dr. Dhaval Shah came up with the idea of building an online pharmacy. Both of them agreed on the potential of technology in the healthcare sector and it is this idea that primarily gave rise to PharmEasy in 2014. Presently, the company extends its supplies to nearly 98% of the Indian pin codes.
The company wanted to achieve the mission of doorstep delivery of everything related to healthcare, which it is always on the verge of achieving. Digitization has become an integral component of India's healthcare industry. Be it scheduling a doctor's appointment or delivery of reports and medicines, every step in the industry has been digitized. A major chunk of the credit goes to the e-pharmacies like PharmEasy for this initiative. The "health commerce industry" in India is growing at unprecedented rates courtesy of these e-pharmacies.
PharmEasy - Name, Tagline and Logo
"Take it easy PharmEasy" says the tagline of the company.
PharmEasy - Business Model
PharmEasy delivers medicines and other medical accessories across Indian towns and cities. It is like Grofers for medicine. The pin codes maintained by PharmEasy are used to identify pharmacies closest to the customers. Customers can either access PharmEasy's website or use its mobile app to order items. They are entitled to discounts of up to 20% if they order using the mobile app, which further increases brand recognition and adds new customers to PharmEasy.
PharmEasy is an e-pharmacy, the processes of which are mostly online acting as a 3-way chain between the buyers, suppliers, and the distribution network.
Buyers - PharmEasy is a ready platform from which buyers can search for their medicines or healthcare accessories and buy them online without any hassles.
Suppliers - PharmEasy collaborates with a wide range of local suppliers and medical shops, all of which help the company arrange their stocks and keep them live online. Besides, the company also earns revenue from various pharmaceutical companies that want to showcase their products online and on the PharmEasy app as featured brands.
Distribution channel - PharmEasy operates with a vast distribution spread out all across the nation. This helps the company to deliver its products for a broad range of pin codes all over India.
Due to various rules and regulations set by the Indian government, the company doesn't deliver Schedule H drugs.
Why do people abstain from e-pharmacies? Research has found that most people do this because they aren't sure where the medicines are coming from. PharmEasy is dispelling this notion for good!
Shubham Kumar
PharmEasy - Revenue Model
PharmEasy primarily earns by displaying the sponsored results of various pharmaceutical entities. These kinds of advertisements are found on the home pages of such organizations. Advertising is a major source of revenue and this e-pharmacy leverages it to the hilt. Besides, with the new-age strategies, you can now advertise your products, services, or business with little or no money and market your brand. Attractive discounts also contribute to PharmEasy's revenue. Furthermore, PharmEasy earns commission from its customers for the healthcare products and medicines that are sold via the platform. The brand also earns through the delivery charges that get levied on the products.
PharmEasy - Funding and Investors
API Holdings, the parent company of PharmEasy, has raised INR 1,804 crore ($216 million) in a funding round led by Ranjan Pai's Manipal Education and Medical Group (MEMG) along with its existing investors on 29 April 2024. However, this new investment comes with a 90% drop in the company's valuation from its highest point. The valuation of PharmEasy as of September 2024 is $458 million, slashed 92% from the peak of $5.4 billion.
PharmEasy has received $1.7 billion in funding to date in over 14 rounds. PharmEasy had last raised a private equity fund from VestinWolf Capital Management after raising a pre-IPO round worth $354 million from a clutch of investors. Market volatility, low investor sentiments, and the funding winter are some of the popular reasons behind PharmEasy looking to raise funds at a lower valuation.
The primary round saw an infusion of the $354 million funding round was worth $204 million and led by Amansa Capital, Steadview Capital, OrbiMed, Abu Dhabi’s sovereign wealth fund ADQ, and more. In the second round of funding that PharmEasy received, the company mopped up around $150 mn from the partial exits of a bunch of existing angels and other early-stage investors like Fundamentum, Eight Roads Ventures, Bessemer Venture Partners, and others. PharmEasy, which is all set to file its Draft Red Herring Prospectus (DRHP) has also disclosed that over 20 senior employees, five founders, and some of the new investors had picked secondary shares at a valuation of $5.6 billion. The company was valued at $5.4 billion in February 2022. The company is yet to decide on its IPO round and will not be setting its pricing before the nod from SEBI.
Before this round where the company has further raised $354 million worth of funding in its Pre-IPO round of funding, split into 2 rounds, it raised a whopping $500 million round via its Series F funding round that was led by Arokiaswamy Velumani, valuing the company at $1.8 billion in June 2021.
Here are all the funding and investor details of PharmEasy to date.
| Date | Series | Amount | Investors |
|---|---|---|---|
| April 29, 2024 | Venture Round | $216 million | MEMG Family office, Existing Investors |
| Nov 7, 2022 | Debt Financing | - | EvolutionX Debt Capital |
| November 1, 2021 | Private Equity Fund | - | VestinWolf Capital Management |
| Oct 20, 2021 | Venture Round | - | Trifecta Capital Advisors |
| October 18, 2021 | Pre-IPO Round | $354 million | Amansa Capital, Fundamentum, Steadview Capital, Abu Dhabi’s sovereign wealth fund ADQ and more |
| July 7, 2021 | Series F | $500 million | Arokiaswamy Velumani |
| June 17, 2021 | Secondary Market | $20 million | B Capital |
| April 7, 2021 | Series E | $390 million | Prosus Ventures, TPG Growth and others |
| November 27, 2019 | Series D | $220 million | Temasek Holdings and others |
| September 26, 2018 | Series C | $50 million | Eight Roads Ventures India and others |
| September 11, 2018 | Debt Financing | $5.44 million | InnoVen Capital and more |
| February 28, 2018 | Series C | $27.23 million | Eight Roads Ventures India, F-Prime Capital, and others |
| April 25, 2017 | Series B | $2 Million | Bessemer Venture Partners |
| March 30, 2017 | Series B | $16 Million | Bessemer Venture Partners |
Muskaan Kapoor
PharmEasy - ESOPs
PharmEasy was reportedly valued at $5.4 billion in February 2022. Due to the exceptional growth that the company had seen, PharmEasy decided to reward the cofounders and employees by creating new employee stock options (ESOPs) for them.
The healthcare major had passed a special resolution, where it has declared that it would be allotting around 79,987 ESOPs to each of the five co-founders of the firm - Siddharth Shah, Dharmil Sheth, Hardik Dedhia, Karsh Parekh, and Dhaval Shah. The collective worth of all these shares making the Founders’ ESOP pool is estimated to be around INR 236 crores. PharmEasy has also additionally expanded its ESOP pool with INR 356 crore worth of new options for eligible employees. This new ESOP pool has reportedly been expanded with 603,103 equity shares. Moreover, PharmEasy has also amended its existing ESOP Scheme to align it with the SEBI regulations.
PharmEasy - Acquisitions
PharmEasy has acquired 3 companies -
| Acquiree Name | Date | Deal Value |
|---|---|---|
| Aknamed | September 14, 2021 | $144 million |
| Thyrocare Technologies | June 26, 2021 | $605.70 million |
| Medlife | May 25, 2021 | $250 million |
Aknamed - A healthcare company that strives to streamline the supply chain of the industry in India. PharmEasy has acquired Aknamed on September 14, 2021. PharmEasy acquired the majority stakes of Aknamed for an initial investment of INR 308 crores ($41.90 mn). The company will be acquiring Aknamed completely in a few months in a deal size estimated to be around INR 1000 crores ($136.04 mn).
Thyrocare Technologies - Thyrocare is a full automatic diagnostic laboratory, which claims to be the first of its kind in India. PharmEasy acquired Thyrocare on June 26, 2021. In a definitive agreement where the company has acquired 66.1% stakes in Thyrocare, the deal size is mentioned at INR 4564 crores ($620 mn).
Medlife - Medlife is an online medicine supplier from Bangalore, India, which has facilities for home delivery. On September 22, 2020, the Competition Commission of India approved the merger of Medlife (Online Pharmacy) with PharmEasy. It is noted as the First Major Consolidation in this sector after the entry of Amazon and Reliance. According to this deal, PharmEasy's Parent Entity will acquire 100% equity in Medlife and the promoters of Medlife will get a 19.95% stake in the entity. Though the talks of the acquisition began in August 2020, the CCI approval was received in September 2020, and it is not earlier than May 2021, 8 months after the CCI nod that PharmEasy finally announced the merger with its rival Medlife. From May 25, 2021, Medlife discontinued its operations and fully merged into the PharmEasy platform. The company acquired majority stakes in Medlife valued at $250 million.
PharmEasy - Challenges Faced
The company started its journey in the year 2014 and has now become a major player in the online pharmacy segment. However, PharmEasy didn't witness overnight success. Challenges are inevitable and the mentioned e-pharmacy also had its share of problems. It was difficult for PharmEasy to deliver products without a prescription.
Knowing the medicines by their names wasn't enough. A valid prescription was compulsory for supplying the products. Many didn't want to upload their prescriptions fearing consequences. Furthermore, location tracking back then when the company started, was difficult for PharmEasy's delivery agents. It is not like that anymore, though.
The company eventually overcame the challenges thrown at it and has grown tremendously since its inception in 2014.
PharmEasy Layoffs
PharmEasy laid off 40 employees, as per the reports on June 16, 2022. The company has laid off around 40 of the employees who were working with its subsidiary Docon Technologies during the week. These employees who were laid off mainly belonged to the sales department and hailed from Mumbai, Delhi, Chandigarh, Jaipur, and more. PharmEasy has offered a two-month salary for the employees as part of the severance package and is reportedly helping the employees too in getting new jobs. It was also announced that Docon Technologies would be rebranded to PharmEasy One and would then be a whole entity and that most of the Docon employees would be shifted to any of the API Holdings’ entities.
gagan singh
PharmEasy - Customer Acquisition
Customer acquisition of a company depends upon trust and faith. It's a symbiotic relationship between how much the company is giving to its customers and how those users are benefitting in return.
Acquiring new users has not been problematic for PharmEasy ever since it overcame the initial hiccups and challenges. A solid user-retention rate has proved PharmEasy's expertise in keeping customers satisfied.
PharmEasy - Partnerships
Swiggy
Swiggy plans to enter the online pharmacy market by delivering medicines in 10 minutes. Partnering with PharmEasy, it will leverage its infrastructure and regulatory framework via Instamart for rapid delivery of prescription and OTC drugs.
PharmEasy - Competitors
The company's top competitors are -
- Tata 1Mg
- Ranger Health
- Medibuddy
- Myra Medicines
- Hello Heart
- BrownPacket and more.
Besides, there are also other hospitals and chains like Apollo Pharmacy that are trying to boost overall sales via their online platform along with their brick-and-mortar stores. Most of the companies mentioned here are trying to reinforce their online delivery system of medicines. However, most of them are trailing PharmEasy.
PharmEasy - Growth and Revenue
PharmEasy Financials
| PharmEasy Financials | FY22 | FY23 | FY24 |
|---|---|---|---|
| Operating Revenue | INR 5,729 crore | INR 6,644 crore | INR 5,664 crore |
| Total Expenses | INR 8,491 crore | INR 8,974 crore | INR 7,254.8 crore |
| Profit/Loss | Loss of INR 2,731.7 crore | Loss of INR 5,211.7 crore | Loss of INR 2,533.5 crore |
In 2023, PharmEasy had an operating revenue of INR 6,644 crore, and its total expenses were higher at INR 8,974 crore, leading to a loss of INR 5,211.7 crore. In 2024, their revenue decreased to INR 5,664 crore, and expenses also dropped to INR 7,254.8 crore, resulting in a smaller loss of INR 2,533.5 crore.
Dhaval Shah and Dharmil Sheth are playing a major role in this growth through excellent leadership and superior decision-making.
| PharmEasy Financials | FY22 | FY23 | FY24 |
|---|---|---|---|
| EBITDA Margin | -39.66% | -20.38% | -9.59% |
| Expense/Rupee of ops revenue | INR 1.48 | INR 1.35 | INR 1.28 |
| ROCE | -32.11% | -27.12% | -15.71% |
India's IPO market slowed in 2022 after 2021 saw the largest amount of funds raised in at least a decade. API Holdings Ltd., owner of India's largest online pharmacy PharmEasy, withdrew its preliminary filing for an initial public offering, citing market conditions and strategic considerations. PharmEasy had filed its DRHP with the market regulator SEBI and was planning to raise INR 6,250 crore through a fresh issue of shares on November 10, 2021. The existing investors of the company were not selling any shares in the upcoming IPO, as per the DRHP.
Furthermore, PharmEasy had announced that it would be looking for a pre-IPO fundraising of up to INR 1,250 crore via private placement after consulting with the BRLMs (Book Running Lead Manager). However, according to the latest news, PharmEasy was looking to slash its IPO valuation considering the volatility of the current market, as of February 19, 2022. PharmEasy currently partners with over 60K brick-and-mortar pharmacies from across the country and has served 20 mn+ patients since it was formed.
Finally, there is no shortcut to success and PharmEasy is a case in point. From being an unknown candidate in the online pharmacy space to becoming an established brand, Dharmil Sheth-founded PharmEasy has conquered varying obstacles to reach the zenith of success.
PV Vyshnavi
PharmEasy - Future Plans
PharmEasy plans to launch an IPO in the future if its performance remains strong. The company is working to reduce its debt before going public. It is waiting for approval from the Competition Commission of India (CCI) to move ahead with its plans.
FAQs
Who is PharmEasy owner?
API Holdings Private Limited is the Parent Organisation of PharmEasy. Dhaval Shah and Dharmil Sheth are the Founders of PharmEasy.
How much is PharmEasy Revenue and Profit?
In 2023, PharmEasy had an operating revenue of INR 6,644 crore, and its total expenses were higher at INR 8,974 crore, leading to a loss of INR 5,211.7 crore. In 2024, their revenue decreased to INR 5,664 crore, and expenses also dropped to INR 7,254.8 crore, resulting in a smaller loss of INR 2,533.5 crore.
How PharmEasy work?
Customers can upload a prescription on PharmEasy, which is then sent to a drugstore in your vicinity. The package is then delivered to their doorsteps within the stipulated time.
How much is PharmEasy net worth?
API Holdings, the parent company of PharmEasy, had its valuation reduced to $458 million in September 2024.
Is the Pharmeasy office in Bangalore its headquarters?
No, the Pharmeasy headquarters is in Mumbai, Maharashtra but it has its office in Bangalore.
How much funding have Pharmeasy funding rounds earned for the company?
The Pharmeasy funding rounds have helped the company raise a whopping $1.7 bn, as of November 2024.
What are PharmEasy acquisitions?
Aknamed, Thyrocare, and Medlife are the 3 major PharmEasy acquisitions.
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