API Holdings, the parent company of the online pharmacy platform PharmEasy, has experienced a substantial valuation cut to $458 million, marking a significant 92% drop from its peak valuation of $5.6 billion in 2021. This drastic markdown was implemented by PharmEasy’s investor, Janus Henderson, a global asset management company, which reduced the value of its investment in the company by 91.8%, as per filings with the SEC.
Earlier in April, PharmEasy’s valuation saw a sharp decline of 90% when it raised Rs 1,804 crore (approximately $216 million) in a funding round led by Ranjan Pai‘s Manipal Education and Medical Group (MEMG) along with participation from existing investors. The company, based in Mumbai, has been seeking to raise around Rs 3,500 crore to repay debt borrowed from Goldman Sachs. However, PharmEasy, led by Dharmil Shah, defaulted on its loan terms with Goldman Sachs in June 2023. Around that time, Janus Henderson further reduced PharmEasy’s valuation by nearly 50%.
PharmEasy also had to postpone its initial public offering (IPO) plans, citing unfavorable market conditions. Although the company filed its Draft Red Herring Prospectus (DRHP) in November 2021, it withdrew its IPO plans in August 2022 due to market volatility.
In recent times, other well-funded companies, such as Swiggy and Byju’s, have also seen their valuations reduced by their investors. For instance, Gupshup’s investor, Fidelity, cut the SaaS firm’s valuation to $500 million, down from over $1.4 billion in its last equity funding round.
According to a startup data intelligence platform, PharmEasy reported a 16% year-on-year growth in revenue, reaching Rs 6,643 crore in FY23. However, its losses, for the Temasek-backed company, increased by 30.5% to Rs 5,211 crore during the same period. The company has yet to file its annual financial statements for FY24.