A $100 million investment in a single round? That’s not usual for the Indian health-tech space.

However, Mumbai based e-pharmacy PharmEasy is apparently in talks with multiple investors for that exact figure. 

PharmEasy has stayed mum about investments, but an investment banker says that it’s the frontrunner among Indian e-pharmacies for the coveted $100 million. The investment banker is one among many trying to figure out a way to broker an investment deal between large multinational investors—namely SoftBank, Naspers and Temasek—and PharmEasy. 

The company could reach or cross the coveted figure of $100 million fundraise in its Series D (but most investors don’t expect its valuation to go up to $1billion). It appears to be following the footsteps of Chinese e-pharmacy 111 Inc, which was once an investors’ darling. And it has come far. 111 Inc went public in the US last September, with an enterprise value of $945 million, just shy of the $1 billion tag that accords a startup the ‘unicorn’ status.

PharmEasy and 111 Inc have a fair bit in common. But most significantly, both companies have focused on building a pharma distribution or a business-to-business (B2B) channel alongside a retail or business-to-consumer (B2C) business.

PharmEasy started in 2014 as a hyperlocal online pharmacy. The drugs ordered online were largely acquired from neighborhood chemists. Two years in, it moved on to establishing a technology that connects the drug distributors with retailers or the neighbourhood chemists. Also, it started to invest in building infrastructure and processes for distribution. It became an asset-light intermediary coordinating supply to make sure that the majority of drugs are available to its users via existing distributors and retailers, and that they’re home delivered. This model differentiated PharmEasy from its contemporaries—1mg, Netmeds and Medlife. And aided growth. 

Its distribution subsidiary Thea Technologies’ revenue rose from Rs 14.3 lakh ($19,941) in the year ending March 2016 to Rs 110 crore ($15.3 million) two years later. PharmEasy, unlike the other three major e-pharmacies, has shown a commitment to distribution. While its rivals prefer to focus on the B2C aspect of the e-pharmacies like manufacturing private labels and getting close to the manufacturers by eliminating the middlemen, PharmEasy wants to be the middleman in the Indian e-pharmacy market – estimated to be $350 million in 2018 and growing at 42%.

Still, the four leading Indian e-pharmacies share a common past. First, they’ve managed to win over suspecting policy makers, some who were conducting raids and issuing bans on online sale of medicines even a year ago. Later this month, the government is expected to notify draft rules favouring sale of drugs by e-pharmacies.


Ruhi Kandhari

Ruhi writes on the impact of healthcare policies, trends in the healthcare sector and developments on the implementation of Electronic Health Records in India. She has an M. Sc. in Development Studies from the London School of Economics.

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