How Has PharmEasy Success Story made Ordering Medicines Simple?
The pharmaceutical sector has been booming, though the pharmaceutical industry’s wholesale and retail market plans amazed all, it was clear that the plans will be fully digitalized.
We can now order medicines from a variety of eCommerce medical stores online and have them delivered online easily, all thanks to the digitalization of the medical sector. PharmEasy is one of the main companies that facilitates simple online medication ordering.
To streamline and modernize the healthcare system in India, PharmEasy has created a healthcare delivery platform. The platform helps patients to maintain contact with a variety of neighborhood pharmacies and retail locations. Today’s health sector is driven by data and technology, and PharmEasy is utilizing both of these to improve healthcare in India.
It provides an online pharmacy and manages the hassle-free delivery of medicine and other medical supplies. PharmEasy is active in a number of India’s largest cities. PharmEasy has made it convenient and simple to buy medicines online.
Every day, the organization sends thousands of consumers their medicines and other medical supplies. Continue reading to learn more about the founder, company plan, growth, competition, revenue model, funding information, and acquisitions of PharmEasy.
What Is PharmEasy And How Does It Work?
A pharmacy is an online store where customers can buy prescription drugs and other medical supplies. Every prescription that is uploaded to PharmEasy is then delivered to your near pharmacy. The business webpage and mobile technology provide people with high-quality healthcare supplies at competitive prices.
A discounted product would undoubtedly be of low quality, you would be thinking. Here the discounted price has nothing to do with a quality compromise. The pharmacy provides high-quality goods that are on par with those found in reputable pharmacies and medical supply stores.
After PharmEasy transmits your prescription to the pharmacy, a delivery agent picks up the medicines from the pharmacy while following all procedures and rules of the company. Your order is then wrapped and brought to your door.
PharmEasy – Business
The medical/healthcare sector has been booming with the rest of the modern economy, helped along by the spread of the internet and new-age technologies. Internet users are projected to continue growing between 2020 and 25 at a CAGR of 8.78 percent after growing at a CAGR of 18.17 percent from 2015 to 2019.
Additionally, from April to September 2020, there was a 71.3 percent rise in e-commerce transactions.
It can be said that the market for Indian e-pharmacies, which was earlier estimated to be about $360 million (Rs 2810 crore), will increase by more than 7X between 2019 and 2023 and reach $2.7 billion (Rs 21,081 crore) by that time.
PharmEasy – The Team and Founders
PharmEasy was founded by Dharmil Sheth and Dr. Dhaval Shah. The two most crucial members of the company are Dhaval Shah and Saumil Parekh. The PharmEasy team has its sights set on becoming India’s top healthcare delivery company. The current emphasis is on full digitization. The enterprise is hiring new employees every other day.
Dharmil Sheth:
Being a co-founder of API Holdings, Dharmil founded PharmEasy. He founded and still leads Ekagrata. Meanwhile, Sheth also founded 91streets. Dharmil holds a Btech in electronics engineering and went on to earn an MBA in marketing from IIM Ghaziabad. Among the first businesses Dharmil Sheth worked for in business development and as a summer intern, respectively, were Techno Gravity Solutions and MakeMyTrip.com.
Dr. Dhaval Shah
After receiving his MBBS from Rajiv Gandhi Government Medical College, Dr. Dhaval Shah went on to XLRI Jamshedpur to earn his MBA. At his two colleges, Shah act as general secretary. He finally rose to the position of Consultant at McKinsey & Company before founding API Holdings and PharmEasy. According to Pharmeasy’s Linkedin profile, the company has between 1001 and 5000 employees.
PharmEasy – Startup Story
Building an internet pharmacy was the brainchild of PharmEasy founder Dharmil Sheth and his friend, the physician Dr. Dhaval Shah. Their shared belief in the potential of technology in the healthcare industry was the main driving force for the creation of PharmEasy in 2014. Currently, they provide its services to around 98% of Indian pin codes.
The business sought to complete its objective of providing everything linked to healthcare at customers’ doorsteps. The Indian healthcare sector now relies heavily on digitization. Every step in the sector has been digitalized, from making an appointment with a doctor to getting results and medicines delivered. The e-pharmacies like PharmEasy deserve an appreciation for this step.
PharmEasy – Business Model
PharmEasy provides medicines and other medical supplies to villages and cities of India. Grofers for medicine, if you will. The PharmEasy pin codes are used to locate the pharmacies closest to the clients.
Customers can place orders through PharmEasy’s website or mobile app. If users use the mobile app to place their orders, they are eligible for discounts of up to 20%, which helps PharmEasy gain more brand recognition and attract new clients.
PharmEasy is an online pharmacy that acts as a three-way chain between customers, vendors, and the distribution system.
Buyers – PharmEasy is a ready platform where customers can look for their medicines or medical supplies and easily purchase them online.
Suppliers – PharmEasy works with many regional vendors and pharmacies, all of whom assist the business in setting up its inventories and maintaining its online availability. Additionally, the business receives payments from other pharmaceutical firms that want to display their brands on the PharmEasy app and online.
Distribution channel – PharmEasy has a broad distribution network that is dispersed all over the country. This enables the business to supply its items over a large number of Indian pin codes.
The revenue model for PharmEasy
PharmEasy makes money primarily by showing sponsored results from different pharmaceutical companies. On the home page of such organizations, you can find these kinds of adverts.
The main source of income for this online pharmacy is advertising, which it fully utilizes. Additionally, you may now sell your brand and advertise your goods, services, or company for little to no money thanks to new-age tactics. PharmEasy’s income is also rising by discounts.
Additionally, PharmEasy receives commissions from people for the medical supplies and medicines that are sold on the platform. It also makes money from the shipping fees that are assessed on the goods.
PharmEasy – Funding, and Investors
So far, $1.60 billion has been invested in PharmEasy. After receiving a $354 million Pre-IPO round from a number of investors, PharmEasy most recently raised a private equity fund from VestinWolf Capital Management.
According to sources dated July 20, 2022, the company is also aiming to raise about $200 million at a valuation that is 15 to 25 percent lower than its $5.1 billion valuation from the previous year. PharmEasy is seeking investment at a lower value for a number of reasons, including market volatility, poor investor confidence, and the funding winter.
$204 million was invested in the primary round of the $354 million investment round, which was led by Amansa Capital, Steadview Capital, OrbiMed, Abu Dhabi’s sovereign wealth fund ADQ, and other investors.
PharmEasy raised $150 million in its second round of fundraising from the partial exits of a number of early-stage investors and angel investors, including Fundamentum, Eight Roads Ventures, Bessemer Venture Partners, and others.
PharmEasy has revealed that more than 20 senior employees, five founders, and some new investors have chosen secondary shares at a valuation of $5.6 billion. The company is preparing to submit its Draft Red Herring Prospectus (DRHP).
As of February 2022, the corporation has a worth of $5.4 billion. The company has not made a decision on its IPO round and will not fix its price until receiving SEBI’s approval.
Prior to this round, the company raised a whopping $500 million via its Series F funding round, which was led by Arokiaswamy Velumani, valuing the company at $1.8 billion in June 2021. This round saw the company raise a further $354 million in funding in its Pre-IPO round of funding, split into 2 rounds.
PharmEasy – ESOPs
According to reports, PharmEasy was valued at $5.4 billion in February 2022. PharmEasy has decided to reward the cofounders and workers by establishing new employee stock options (ESOPs) for them in light of the outstanding growth the company has seen.
The healthcare giant recently approved a special resolution stating that each of the company’s five co-founders—Siddharth Shah, Dharmil Sheth, Hardik Dedhia, Karsh Parekh, and Dhaval Shah—will receive around 79,987 ESOPs. The Founders’ ESOP pool of shares is projected to be worth a total of about Rs 236 crores.
Additionally, PharmEasy has added new options worth Rs 356 crore to its ESOP pool for qualified employees. 603,103 additional stock shares have purportedly been added to this new ESOP pool. Additionally, PharmEasy updated its current ESOP Scheme to comply with SEBI rules.
Acquisitions – PharmEasy
The most recent company that PharmEasy purchased was Aknamed, a healthcare supply chain management firm based in Bangalore. According to the regulatory filings, the latter has authorized the sale of 975,937 equity shares to API Holdings for Rs 3,155.94 in order to raise around Rs 308 crores (or $42 million) from the parent company of PharmEasy.
The top five promoters of the business, including the co-founders, reportedly sold their holdings to the corporation for a reported sum of 50.67 percent. Aknamed will now act as a division of API Holdings Pvt Ltd, the parent company of PharmEasy.
Previously, on June 26, 2021, PharmEasy paid Rs 4,546 crores for 66.1 percent interest in Thyrocare, a Mumbai-based Indian diagnostics, and preventive care laboratory. The buyer was Docon Technologies Pvt Ltd, a division of API Holdings, the buyer of PharmEasy.
PharmEasy has purchased 3 businesses:
Aknamed is a healthcare organization that works to improve the Indian healthcare sector’s supply chain. Aknamed was purchased by PharmEasy on September 14, 2021. PharmEasy paid an initial investment of Rs 308 crores ($41.90 million) to buy the bulk of Aknamed’s shares. In a few months, the company will fully acquire Aknamed in a deal worth approximately Rs 1000 crores ($136.04 million).
Thyrocare technologies – Thyrocare is a fully automatic diagnostic facility that prides itself on being India’s first of its type. On June 26, 2021, Thyrocare was purchased by PharmEasy. The purchase size is listed as Rs 4564 crores ($620 mn) in a formal agreement where the corporation has bought 66.1 percent ownership in Thyrocare.
Medlife – Based in Bangalore, India, Medlife is an online pharmacy that offers home delivery. The combination of Medlife (Online Pharmacy) with PharmEasy was given the go-ahead on September 22, 2020, by the Indian Competition Commission.
Following the advent of Amazon and Reliance, it is considered the First Major Consolidation in this industry. The promoters of Medlife will get a 19.95 percent ownership position in the firm, and PharmEasy’s Parent Entity will purchase all of the equity in Medlife.
Even though the purchase negotiations started in August 2020, the CCI gave its clearance in September of that year. It wasn’t until May 2021, eight months after the CCI’s approval, that PharmEasy officially announced its merger with rival Medlife.
Beginning on May 25, 2021, Medlife ceased operations and was assimilated into the PharmEasy platform. A $250 million majority stake in Medlife was purchased by the company.
PharmEasy – Issues
The business began operations in 2014 and is currently a significant player in the online pharmacy market. PharmEasy, however, did not experience overnight success. There will always be difficulties, and the aforementioned online pharmacy was not exempt. PharmEasy found it challenging to supply goods without a prescription.
It wasn’t enough to know the names of the medications. A current prescription was required in order to supply the products. Many people were afraid of the consequences if they uploaded their medications. Furthermore, it was challenging for PharmEasy’s delivery staff to track their locations at the time the company was founded. But things aren’t like that anymore.
The company eventually surmounted the obstacles placed in its path and has significantly expanded since its founding in 2014.
Layoffs at PharmEasy
According to sources, 40 people were let go by PharmEasy on June 16, 2022. About 40 employees who spent the week working for the company’s subsidiary Docon Technologies have been let go.
These laid-off workers primarily worked in the sales division and came from Mumbai, Delhi, Chandigarh, Jaipur, and other cities. As part of the severance deal, PharmEasy offered the staff a two-month compensation and, according to reports, is also assisting them in finding new employment.
40 people were let go by PharmEasy. Additionally, it was disclosed that Docon Technologies would change its name to PharmEasy One and become a standalone company, with the majority of its staff moving to one of API Holdings’ companies.
Acquisition of Customers for PharmEasy
A company’s ability to acquire customers is entirely dependent upon trust and faith. The amount that the business gives to its clients and how those users profit in return are mutually beneficial.
Since overcoming the early difficulties and obstacles, PharmEasy has not experienced any difficulties in gaining new users. A high user retention rate attests to PharmEasy’s prowess in retaining clients.
PharmEasy – Competitors
The company’s top competitors are –
- Tata 1Mg
- Ranger Health
- Medibuddy
- Myra Medicines
- Hello Heart
- BrownPacket
Along with their physical locations, other hospitals and companies like Apollo Pharmacy are attempting to increase overall sales through their online platforms. The majority of the businesses featured here are working to improve their medication distribution method online. But most of them are lagging PharmEasy.
PharmEasy – Revenue and Growth
The business is expanding dramatically.
Easy Financials Pharm
The company’s sales nearly quadrupled from Rs 340 crore in the previous fiscal year to about Rs 737 crore in FY20. Impressive! Dhaval Shah and Dharmil Sheth, who exhibit exceptional leadership and sound judgment, are significantly contributing to this growth.
According to the financial reports for the fiscal year 2021, PharmEasy has achieved yet another record of growth, increasing its income by 220 percent to Rs 2,360 cr in FY21 from Rs 737.4 cr in FY20.
Along with the company’s revenue growth, costs also increased, rising by 147.8% from Rs 1,084.4 cr in FY20 to Rs 2,980.9 cr in FY21. When it comes to profit and loss, PharmEasy has been increasing its losses, which increased by over 91 percent to Rs 641.3 Cr in FY21 from Rs 335.2 Cr in FY20.
PharmEasy has submitted its DRHP to market regulator SEBI, and on November 10, 2021, it intends to raise up to Rs 6,250 crores through a new share offering. According to the DRHP, no shares of the company’s existing investors would be sold in the planned IPO.
Additionally, PharmEasy has stated that it will seek to collect up to INR 1,250 Cr through a private placement as part of its pre-IPO fundraising efforts after conferring with the BRLMs (Book running lead manager).
According to the most recent reports, PharmEasy is considering lowering its IPO valuation as of February 19, 2022, in light of the market’s volatility.
Since its founding, PharmEasy has worked with more than 20 million patients and currently partners with more than 60K traditional brick-and-mortar pharmacies nationwide.
Finally, PharmEasy is proof that there is no quick route to success. Dharmil Sheth founded PharmEasy, which overcame numerous challenges to become a well-known brand after starting out as an unknown contender in the online pharmacy market.
Future Plans for PharmEasy
Toward the end of 2021, PharmEasy had initially chosen to raise roughly Rs 6,250 cr through new share issuance. The pharmacy unicorn is considering this IPO round as of February 2022. Due to market volatility, the healthcare unicorn is currently rethinking the timing of the launch of its IPO.
