[Updated] Temasek leads $220m round for Indian online pharmacy startup PharmEasy

Photographer: Krisztian Bocsi/Bloomberg

Mumbai-based online pharmacy startup PharmEasy has raised $220 million in a fresh round of financing led by Singapore state investment firm Temasek Holdings Pte.

The development was first reported by BloombergQuint, which cited unidentified sources. DealStreetAsia independently confirmed the funding with a source close to the development.

Canada’s second-largest pension fund Caisse de dépôt et placement du Québec (CDPQ); LGT, the private banking and asset management group controlled by the Princely family of Liechtenstein; and South Korea’s KB Financial Group also took part in the round.

Existing investors Bessemer Venture Partners, Orios Venture Partners, Eight Roads, Infosys co-founder Nandan Nilekani and Helion Ventures co-founder Sanjeev Aggarwal-backed Fundamentum, too, joined.

Co-founded by Dhaval Shah and Dharmil Sheth in 2015, PharmEasy has attained a valuation of $700 million in the latest round.

Sheth declined to comment on the funding. On expansion plans, however, he said the company will focus on further improving the consumer experience, technology and processes to ensure timely delivery of all the medicines in the safest way possible.

“There’s a lot of integration happening on the supply chain front. We are connecting different stakeholders seamlessly. We are integrating the retailers, distributors and the pharma companies on our technology platform. This is one of the biggest levers that we now have. This technology is going to change the way healthcare works in India,” Sheth said.

The financing comes almost a year after PharmEasy raised $50 million in a Series C round of funding led by Eight Roads Ventures India, F-Prime Capital, Fundamentum, and San Francisco-based hedge fund Think Investments. BVP also participated in that round.

PharmEasy connects patients to local pharmacies and diagnostic centres through an integrated online platform, making healthcare accessible and affordable across India via quick doorstep deliveries and savings on their healthcare needs. It also provides services including home diagnostic tests, medicine dosage reminders and an automated medicine refill subscription.

“We deliver medicines to each and every pincode in the country, which comes to about 22,000 pincodes spanning from Kashmir to Lakshadweep. We have more than 100,000 SKUs, which we deliver on a monthly basis,” Sheth said.

PharmEasy boasts of a workforce of over 2,000.

On consolidation or acquisition opportunities in the space, Sheth said, “We are looking at synergistic areas be it medicine delivery, technology, or platforms that can be used by doctors and delivery boys. There are talks happening with multiple players.”

E-pharmacy potential in India

E-pharmacy is at a nascent stage in India, but like other categories, has the potential to be a very large industry segment in the near future, said Frost & Sullivan in its report earlier this year. The advent of online pharmacy retailers in the Indian market will further increase the penetration of the organized pharmacy segment.

The report added that the e-pharmacy market in India is estimated to grow at a CAGR of 63% to reach $3.6 billion by 2022. It is expected that the e-pharmacy model could account for 15%-20% of the total pharma sales in India over next 10 years.

Other key players operating in the space include Medlife, Netmeds,1MG, Myra, CareOnGo and Pharmasafe.

Temasek bullish on India

According to a Mint report in July, Temasek is looking to deploy more capital in India even as it is going slow on investments globally. The investment firm’s India portfolio stood at $11 billion as on 31 March 2019, compared to nearly $10 billion a year ago.

Last year in September, the Singapore firm announced an investment of $400 million in the National Investment and Infrastructure Fund (NIIF), a fund set up by the government of India to boost infrastructure financing in the country.

In June this year, Temasek said that it would invest a total of Rs 1,000 crore in its portfolio company AU Small Finance Bank through fresh shares and warrants. It also owns stakes in Ascendas India Logistics Programme, Adani Ports and Special Economic Zones Ltd, and payments technology firm Pine Labs.

The firm is also reportedly in talks with Swedish alternative investment firm EQT Partners to launch a green energy platform in India with initial combined equity commitment of $500 million. Temasek is also in race to buy the gas pipeline assets of state-run Gail (India) Ltd.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.