Mumbai-based API Holdings, which runs online medicine delivery startup PharmEasy, has raised USD 350 million from Prosus Ventures and US-based private equity firm TPG Growth.
Post the investment, the company’s valuation has soared to USD 1.5 billion, making it the first unicorn, or a startup with USD 1 billion-plus valuation, in the country’s online pharmacy space, said a report by Bloomberg.
Existing investors Temasek, Caisse de dépôt et placement du Québec, LGT Lightrock, Eight Roads, and Think Investments, also participated in the round, which will be a mix of primary capital and secondary investment.
The Bloomberg report added that PharmEasy is already raising its next round at a valuation of about USD 1.8 billion.
Prior to this, in November 2019, PharmEasy landed a USD 220 million check in Series D round led by Temasek at a valuation of USD 700 million. The latest transaction has thus more than doubled the company’s valuation. With this deal, API Holdings has become the seventh Indian unicorn this year after Cred, Meesho, Digit Insurance, Innovaccer, Infra.Market, and Five Star Finance.
PharmEasy plans to invest fresh funds in strengthening its supply chain and expanding the base of pharmacies on its platform to 200,000 from the current 80,0000 across 100 cities over the next two years, the company told local media Economic Times (ET).
The company, which has partnered with 60,000 offline pharmacies and 4,000 doctors, said it will also invest in boosting its telemedicine business that does nearly 500,000 online consultations a month. Meanwhile, it is also building products to digitize doctors and is looking to work with hospitals as well.
Founded in 2015, PharmEasy allows users to order medicines, healthcare products, and book appointments for diagnostic tests from laboratories.
After the pandemic struck the country last March, online pharmacy services saw a spike in demand during the nation-wide lockdown as millions of Indians opted to order medicines and healthcare essentials online. The competition in the segment heated up in August when oil-to-telecom Indian conglomerate Reliance acquired a 60% stake in Netmeds for USD 83 million, and American e-tailer Amazon kicked off its medicine delivery service in the country.
The same month, PharmEasy joined hands with smaller rival Medlife for a merger to safeguard the joint market share against the bigwigs eyeing the digital pharmacy sector. Medlife sold 100% stakes to API Holdings, in return for 19.59% ownership in the merged entity.
The recent investment comes at a time when USD 106 billion salt-to-software Indian conglomerate Tata Group is eyeing to scoop up a majority stake in online medicine startup 1Mg, and Amazon is reportedly mulling to put in a USD 100 million check in Indian pharmacy chain Apollo Pharmacy.
According to Bengaluru-based consulting firm Redseer, by the financial year 2025, the e-health players are expected to clock an annual GMV of up to USD 19 billion. Of this, e-pharmacy alone is likely to reach a GMV of USD 13.3 billion by FY 2025.