Exclusive: PharmEasy raises Rs 120 crore from Temasek, Lightstone

E-pharmacy platform PharmaEasy is raising Rs 120 crore (about $16.6 million at current foreign exchange rates) in a funding round led by returning investor Temasek Holdings. Lightstone Fund, a unit of LGT Lightstone, is participating in the round. 

Singapore state investment firm Temasek will invest Rs 90 crore ($12.44 million) through its indirect wholly-owned subsidiary MacRitchie Investments Pte Ltd, according to regulatory filings. Temasek and Lightstone will together invest a total of Rs 120.7 crore, the filings showed. 

Email queries to PharmEasy, Temasek and Lightstone didn’t elicit responses at the time of publishing this report.

The latest infusion comes ahead of API Holdings, the Mumbai-based parent company of Pharmeasy, closing a $300 million funding round from private equity firm TPG Growth and South African technology and media conglomerate Naspers. TPG Growth is slated to infuse about $125 million, while the rest will come from Naspers, a person privy to the development told TechCircle early this month.

The round, which is expected to value the startup at $1.2 billion, will have an additional $50 million secondary component to buy out early investors.

The Competition Commission of India (CCI) had approved Lightstone’s investment  in August last year. On Tuesday, the CCI approved an investment proposal by CDPQ, Canada’s second largest public pension fund, in PharmEasy. The pension fund is picking up an additional  2% stake.

Temasek was part of an investor consortium that pumped $220 million into PharmEasy in 2019. Other investors in the round included KB Financial Group, Fundamentum, Eight Roads, Bessemer Venture Partners, Orios Venture Partners, and CDPQ.

Founded in 2014 by Dharmil Sheth, an IMT Ghaziabad alumnus, and Dhaval Shah, a doctor with an MBA from XLRI Jamshedpur, PharmEasy acquired rival Medlife last year to create an entity valued at a little over $1 billion -- the first e-pharmacy unicorn to emerge from the country.

Medlife also made two acquisitions in 2019 – pharmacy app operator Myra Medicines in May, and digital healthcare platform and home diagnostics services company MedLabz in January. All these entities are now housed under API Holdings. The umbrella unit in engaged in wholesale deals and distribution of drugs, transportation and delivery services, ecommerce and telemedicine platform operations, directly or through its subsidiaries.

Ecommerce or online drug delivery and offline distribution are the mainstays of PharmEasy’s business. Its distribution arm, the second largest after Apollo Hospital backed pharma distributor Keimed, is near profitable, and the retail business is doing phenomenally well, a person aware of the company’s operations told TechCircle recently. 

The company is also expanding its scope of online operations to tap into adjacent opportunities such as doctor appointments, telemedicine and diagnostics.