According to individuals familiar with the situation, Eduardo Saverin’s B Capital and Facebook cofounder has acquired a minority share in online pharmacy PharmEasy for $20 million in a secondary sale. This comes after the Tata’s bought a controlling interest in rival e-pharmacy 1mg only a few days ago.
Tiger Global is also completing a $20 million main capital injection in PharmEasy’s parent company API Holdings.
Adding to the list Pathology service supplier Suburban Diagnostics is also in negotiations with PharmEasy for complete sale.
“B Capital transaction is complete after Everstone Capital exited partially. For Tiger Global, only some paperwork is getting finished and should be complete soon,” a source aware of the matter said.
Everstone Capital, which sold a portion of its stake in the e-pharmacy firm, sold the shares to B Capital.
B Capital is said to have taken a 2% stake which has also invested in companies such as Byju’s, Bounce, and Khatabook.
Dhaval Shah PharmEasy’s cofounder refused to make any comments on the share taken by B Capital. On the other hand, the business is repurchasing employee stock ownership plans (Esops) for $3 million, the second such action in approximately three months.
Over the previous three months, Shah further said that the business has executed Esop buybacks totaling $8 million.
“We are conducting this buyback to reward our staff in these times when liquidity can help them. Our previous Esop buyback was about $5 million a few months ago. In total, we have done $13 million of Esop buybacks. The latest tranche of share purchase has been done by existing shareholders,” Shah said.
Startups like Phonepe, RazorPay, and others have also done Esop buyback over the last months.
Prosus Ventures (previously Naspers) and TPG, a US-based private equity firm, funded $350 million in the business in April. It competes with Tata which has owned 1 mg and Reliance Industries-owned Netmeds, as well as Amazon, which has begun delivering medicines in Bengaluru.
PharmEasy acquired smaller rival Medlife earlier this year, making it the largest online platform in the industry. It is reported to be generating Rs 300 crore in monthly income, thanks to the Medlife acquisition.
It will be fascinating to watch how PharmEasy maintains its market leadership in the future as it prepares to compete with the Tatas and RIL. Sure, long-term investors like Prosus and Tiger Global support entrepreneurs, but corporations like the Tata group and RIL also have significant funds. In fact, this was one of the reasons 1mg ultimately selected the Tatas over private equity investors, despite having secured $100-$150 million in investment.
PharmEasy is in negotiations with bankers as its IPO plans remain intact for the time being.
PharmEasy planned to go public with a $3 billion value.
It intends to establish a network of over 200,000 such pharmacies serving orders across 100 Indian cities in the next two years. The seven-year-old company is aiming to expand its operations and reach across the country. It wants to increase the number of pharmacies in its network to 120,000 in the coming year, up from approximately 80,000 now.
E-pharmacies typically make the most of their money by selling prescription drugs to chronic patients, but they’re also branching out to include services like online medical consultations and diagnostic testing.