Mumbai-based online pharmacy startup PharmEasy has raised USD 220 million—biggest fund raise by an Indian e-pharmacy company—led by Temasek Holdings, with participation from Caisse de dépôt et placement du Québec, the second-largest Canadian pension fund; LGT, the private banking and asset management group controlled by the princely family of Liechtenstein, and South Korea’s KB Financial Group.
This round of funding which also saw participation from existing investors such as Bessemer Venture Partners, Orios Venture Partners, and Eight Roads, among others has pegged the company’s valuation at around USD 700 million.
PharmEasy intends to use the money to enhance its customers’ experience, upgrade technology, and refine processes for timely and safe delivery of medicines.
Founded in 2015 by Dhaval Shah and Dharmil Sheth, the latest financing for PharmEasy happened a year after it raised USD 50 million in a Series C round.
E-pharmacy companies in India have so far raised USD 506 million in 2019, as per data shared by startup and venture capitalist research platform Tracxn.
PharmEasy powered by over 2,000 employees and claiming to serve over one million customers, helps patients get linked to pharmacies and diagnostic centres through its technology driven online interface for quick doorstep deliveries across India. It also facilitates home diagnostic tests, medicine dosage reminders, and runs an automated medicine refill subscription. The company delivers medicines to more than 710 cities including Mumbai, Delhi, Kolkata, Pune, Bengaluru, Jaipur, Thane, and Ahmedabad.
“We deliver medicines to each and every pincode in the country, which comes to about 22,000 pincodes spanning from Kashmir to Lakshadweep. We have more than 100,000 stock keeping units which we deliver on a monthly basis,” Sheth told financial news website DealStreetAsia.
Online pharmacy startups competing with PharmEasy includes 1Mg, Medlife, Netmeds, Medplus, Myra Medicines, Sasta Sundar, CareOnGo, and Pharmasafe. In a recent report by Delhi-based data analytics platform Kalagato, PharmEasy has dethroned 1Mg as the top player in India in terms of the highest monthly frequency of purchases on a platform for the first six months of 2019. In fact, its market share for transactions volume is the largest at 29%, while 1Mg’s has dipped from 23% to 18% in the same time period.
Though e-pharmacy in India is in its infancy, a Frost & Sullivan report in early 2019 stated that it is estimated to grow at a CAGR of 63% to reach USD 3.6 billion by 2022 and would be responsible for 15% to 20% of the total pharma sales in India over the next 10 years. At present the Indian retail pharmacy market is worth USD 18 billion, and by 2025 is expected to grow to USD 50 billion, according to a study by India’s Department of Industrial Policy and Promotion. There are nearly 282 e-pharmacy start-ups in India which account for 3% of the total Indian pharmaceutical market.
India has long been planning to regulate the online pharmacy startups in order to bring them under the government’s lens. Last year, Indian health ministry came out with a proposed draft rules according to which only those businesses which have registered with the Indian government will be allowed to sell medicines online. However, it is yet to become a law.