PharmEasy parent API Holdings in talks with SoftBank to raise $100-200 mn

Softbank is still evaluating proposal. The firm aims to acquire a company in the healthcare space and to clear loans raised earlier, says source

API Holdings, the parent company of digital healthcare startup PharmEasy, is reported to have started preliminary talks with SoftBank to raise $100-200 million. The company, which recently acquired Thyrocare, is planning to raise funds to fuel its inorganic growth plans, said sources close to the development.

“SoftBank is still evaluating the proposal. The company is in talks with several investors, and looking to raise the capital to acquire a company in the healthcare space and clear loans it had raised earlier,” said a person aware of the matter. 

PharmEasy and SoftBank declined to comment on the matter.

"The company is growing very fast. In the online healthcare segment, acquiring customers means a lot of cash burn and that's why it must be raising funds," said another source in the industry.

On an acquisition spree, API Holdings announced last month that it was acquiring a 66.1 per cent stake in diagnostics major Thyrocare for Rs 4,546 crore. It has also made an open offer for another 26 per cent stake, amounting to Rs 1,788 crore. This was the second major acquisition by the unicorn in a span of a few months. API Holdings had announced the acquisition of online pharmacy player Medlife in May, a deal valued over $200 million.

The company already has backing from large investors such as Temasek Holdings, TPG Growth, Prosus Ventures, B Capital, Think Investments, Kotak Realty Fund, and Orios Venture Partners. If SoftBank joins the cap table, it would be a shot in the arm for the company, which is looking at an IPO worth Rs 3,000-3,700 crore at a $3 billion valuation, according to reports. 

SoftBank via its vision fund 2 has made several big bets in the Indian startup ecosystem this year. This includes Meesho, Zeta and Whatfix.  

PharmEasy’s parent has so far raised $1.2 billion over 10 rounds. API Holdings has recently raised $500 million in a series F round. PharmEasy is on a mission to build an integrated digital outpatient healthcare platform across the length and breadth of the country providing information, consultation, tests and treatment. 

According to a RedSeer report, India’s e-health sector touched about $1.4 billion GMV (gross merchandise value) in 2020 and is expected to grow around 10 times in about five years. In the buzzing digital pharma sector, PharmEasy will be taking on behemoths such as Tatas, Reliance and Apollo to make a mark. Last month,  Apollo created the country’s largest omnichannel digital health platform by merging its online and offline pharmacy businesses (excluding hospital pharmacies) and telemedicine verticals into a single entity called Apollo HealthCo. 

Tata Digital, a 100 per cent subsidiary of Tata Sons, entered the digital healthcare space by acquiring 60 per cent in 1MG in a deal valued at $270 million. Mukesh Ambani-led Reliance Industries had last year acquired 60 per cent in online pharmacy Netmeds for Rs 620 crore.