PharmEasy in investment talks with Naspers, TPG

NEW DELHI: South African technology and media conglomerate Naspers and US-based private equity firm TPG are in talks to invest up to $100 million each in Mumbai-based online pharmacy PharmEasy, three sources aware of the development said.

The proposed investment is likely to be done at a pre-money valuation of $1.2 billion, the sources told ET.

The funding talks come less than a month after India’s competition watchdog approved a merger between PharmEasy and smaller rival Medlife, heralded as the first big consolidation play in a sector seeing heightened competition and entry of deep-pocketed players like Reliance Industries and Amazon.

ET was the first to report in August that the merger had been completed.

A spokesperson for Naspers did not comment on the fundraising talks.“It is the company’s policy to neither acknowledge nor deny its involvement in any merger, acquisition or divestiture activity, nor to comment on market rumours,” the spokesperson wrote in response to ET’s email.

PharmEasy did not respond to ET’s queries till the time of going to press. PharmEasy received $100 million from Singapore’s Temasek in August last year, valuing it at $650-700 million. It also wrapped up a $100-120 million equity financing round in July last year, led by a host of new investors, including the second-largest Canadian pension fund CDPQ, and LGT — the private banking and asset management group controlled by the Liechtenstein princely family.

PharmEasy also counts venture capital firm Orios Venture Partners and Eight Roads as its early backers.


The merger of PharmEasy and Medlife saw the latter sell 100% shares to API Holdings, the parent entity of PharmEasy, in return for 19.59% ownership in the combined entity, according to a filing with the Competition Commission of India (CCI), which ET had reviewed.

Top merchant bankers told ET that the broader pharmaceutical sector was expected to see a significant uptick in deal making.

“A lot of capital raising will happen in pharma. People will expand manufacturing capacities across the board. Entrepreneurs are getting more confident about their own businesses. This is a sector which has gone through a crisis of confidence…Whether that will happen through internal accruals, capital, it can be a combination of everything. It’s a big sector to watch out for… I would say this is the beginning phase for pharma again,” Gaurav Deepak, chief executive of homegrown financial services giant Avendus Capital, told ET recently.

Online pharmacies such as PharmEasy and 1mg have registered growth outside their core metropolitan markets by rapidly expanding into tier-2 and tier-3 towns and cities, as they look to grab a larger slice of the Indian consumer wallet.

PharmEasy in investment talks with Naspers, TPG PharmEasy in investment talks with Naspers, TPG Reviewed by TechCO on 10/11/2020 Rating: 5

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