PharmEasy in early funding talks with SoftBank at double its valuation
2 min read . Updated: 25 Mar 2019, 04:19 AM IST- PharmEasy seeks to raise $100 million from SoftBank at a valuation of about $400 million
- The PharmEasy-SoftBank funding talks come at a time when online pharmacies are grappling with a court ban on their operations
Mumbai: Japan’s SoftBank Group Corp. is in early talks to invest close to $100 million in online medicine startup PharmEasy, three people aware of the matter said. PharmEasy is seeking a valuation of about $400 million in the latest round of funding, more than double what it was valued in the previous fundraising, the people cited above said on condition of anonymity.
In September, PharmEasy raised $50 million in a Series C funding round led by Eight Roads Ventures India, the proprietary investment arm of Fidelity International Ltd. Bessemer Venture Partners also invested in the round, taking the total funds raised by PharmEasy so far to $75 million.
The investment proposal comes at a time when online pharmacies are grappling with a court ban on their operations. In December, the Delhi and Madras high courts banned online pharmacies, citing lack of regulatory oversight. While the Madras high court has since stayed its order, the Delhi high court has upheld the ban till a final decision is taken.
“There is an air of uncertainty over online pharmacies because there is still no regulation in place," said Atul Pandey, partner at law firm Khaitan and Co. “There is presently no specific provision in the Drugs and Cosmetics Act, 1940, and the rules framed therein, which regulates e-pharmacies."
SoftBank, which recently sold its stake in online retailer Flipkart to Walmart, is keen to enter the online pharma retail space, which it has identified as a key growth area, one of the three people cited earlier said, requesting anonymity.
“SoftBank wants to be on the board of potentially all the biggest tech companies in the world, and likes companies that either have market leadership or are inching towards it. PharmEasy certainly looks like it could lead the sector soon," this person said. “PharmEasy is growing at 4x year-on-year and could report a revenue of ₹450 crore for the year ending 31 March."
PharmEasy’s revenue more than tripled in FY18 to ₹116 crore from about ₹33 crore in FY17, but losses widened to ₹97 crore from ₹48 crore, according to the company’s latest corporate filings accessed from the Registrar of Companies (RoC).
A SoftBank spokesperson declined to comment on what she termed as speculation.
In an emailed response, PharmEasy co-founder Dharmil Sheth said, “As a part of our vision to improve healthcare access in the country, we do engage with prospective investors, but we wouldn’t be able to make any specific comment on the number or the name."
Founded in 2015 by Dhaval Shah and Sheth, PharmEasy sells medicines, healthcare products and connects patients to local pharmacies and diagnostic centres through an integrated online platform. It also sells diagnostic kits for diabetes, thyroid care and liver function tests, among others.
SoftBank, which appointed Norwest Venture Partners’ Sumer Juneja as its India head, is likely to step up its investments in the country.
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