API Holdings, the parent company of PharmEasy, has faced a significant valuation reduction as global asset management firm Janus Henderson has marked down the online drug marketplace’s valuation to $458 million. This represents a staggering 92% decrease from its peak valuation of $5.6 billion in 2021, according to a U.S. Securities and Exchange Commission (SEC) filing.
PharmEasy, based in Mumbai, had already experienced a severe 90% valuation cut in April 2023 when it secured INR 1,804 crore ($216 million) in funding led by Ranjan Pai’s Manipal Education and Medical Group (MEMG) and other existing investors. The ongoing valuation decline occurs as the company seeks to raise approximately INR 3,500 crore to repay debt to Goldman Sachs, following a default on loan terms in June 2023.
Janus Henderson’s initial markdown of 50% in mid-2023 was further revised down by 91.8%, reflecting broader challenges faced by tech-driven startups in 2024, many of which have encountered similar valuation cuts. PharmEasy’s plans for an initial public offering (IPO) have also been postponed, citing unfavorable market conditions. Despite reporting a 16% year-on-year revenue growth to INR 6,643 crore in FY23, the company’s losses surged by 30.5% to INR 5,211 crore during the same period.
Summary Points:
- PharmEasy’s valuation has been slashed by 92% to $458 million by Janus Henderson, reflecting significant financial challenges.
- The company is attempting to raise INR 3,500 crore to repay debt amidst a broader trend of valuation cuts in the tech startup sector.
- Despite revenue growth in FY23, PharmEasy’s losses have increased, and its IPO plans have been deferred due to market conditions.