API Holdings, the parent company of Mumbai-based online pharmacy PharmEasy, has raised an investment of $350 million from Prosus Ventures and US-based private equity firm TPG Capital, according to ET report.
Prosus Ventures (previously Naspers Ventures) has backed Indian technology startups like Swiggy, Byju’s and Meesho.
The deal is estimated to have valued Pharmeasy at $1.5 billion post-investment, said people in the know, making API Holdings the latest entrant into India’s unicorn club—privately held startups valued at or over $1 billion. API Holdings joins the likes of Cred, Meesho, Digit Insurance, Innovaccer, Infra.Market and Five Star Finance, which all entered the unicorn club this year, at a time when risk investors are flocking to India to back companies at the forefront of the digital economy.
API Holdings did not confirm its valuation post the funding round.
The round also saw participation of existing investors Temasek, CDPQ, LGT Lightrock, Eight Roads and Think Investments, and will be a mix of primary and secondary capital.
The company said it would utilise the fresh funds to expand the base of pharmacies it works with from 80,000 today to 120,000 within the next 12 months. It will enhance it subsequently to 200,000 in the next two years, helping it expand beyond the 100 cities it is present in today.
“We will continue to invest significantly on the supply chain,” said Siddharth Shah, cofounder and chief executive at API Holdings. “It took us eight years to reach 80,000 pharmacies and in the next two years we want to get to 120,000 more pharmacies.”
He added that the company’s model was to digitise existing pharmacies by connecting them to an efficient supply chain.
API Holdings said its business-to-business pharma operations were recording gross merchandise values (GMV) of around Rs 600 crore per month, while its front-end online pharmacy was driving an additional Rs 240 crore to retailers on its platform.
Shah said he didn’t see growing competition in the sector as a bad thing, as there was a lot of headroom for everyone to grow. “The way we look at it is we are very small today. We’re touching about 10% of India’s (pharma) retailers and we’re barely touching 15-18 lakh customers a month. In terms of our GMV (gross merchandise value), we’re just about 3-3.5% of India’s market,” he added.
Ashutosh Sharma, head of India investments at Prosus Ventures, said the investment in API Holdings was intended to tap into the large market for healthcare in India. He said India was still in its early stages of tech adoption in healthcare.
“It’s a very large market and does not just impact the top 10 million or 15 million consumers in India. It’s an all-pervasive product, all 1.3 billion people in India use healthcare in some way,” Sharma said. “The underlying core of the platform (that API Holdings has built) is strong tech capabilities, and that excites us.”
Apart from running a pharma distribution and online marketplace, API Holdings said it was investing in building a telemedicine business that today sees nearly 500,000 online consultations a month. It is also building products to digitise doctors and is looking to work with hospitals as well.
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