November 29, 2022
Review

How Have Ordering Medicines Been Made Simple? – PharmEasy Success Story

PharmEasy

StartupTalky’s Company Profile project aims to provide accurate information about various companies and organizations. PharmEasy has given its approval to the content of this article. As chaotic as we may imagine, the pharmaceutical business has always existed. Although the pharmaceutical sector has provided its clients with a wholesale and retail market structure that we are all pleased with, the digitization of the same was precise. Thus, it occurred. To learn more about pharmacy and pharmaceuticals, Click Here. 

PharmEasy is one of the leading players that makes purchasing medications online simple. To streamline and modernize the Indian healthcare system, PharmEasy has created a platform for healthcare delivery. We can now purchase our medicines from various online medical shops thanks to the digitization of the medical sector and have them delivered without any complications. Thanks to the forum, patients may connect with a variety of neighborhood pharmacies and businesses. PharmEasy is using data and technology to improve healthcare in India. Today, these two pillars drive robust health and well-being ecosystem.

What Is PharmEasy, And How Does It Work?

The business leverages online and mobile technologies to provide its clients with high-quality healthcare supplies at competitive prices. A pharmacy is an online store where customers may buy prescription drugs and other medical supplies. Every prescription uploaded to PharmEasy is then delivered to a nearby pharmacy.

A reduced product would undoubtedly be low quality, and you would think. No, a bargain has nothing to do with a quality compromise. The pharmacy offers high-quality goods that are on par with those found in reputable pharmacies and medical supply shops.

After PharmEasy transmits your prescription to the pharmacy, a delivery person picks up the medications from the pharmacy while following all necessary safety procedures and rules. After that, your purchase is wrapped and delivered to your door.

PharmEasy – Business

The medical/healthcare sector has expanded with the rest of the modern economy, helping spread the internet and new-age technology. Internet users are projected to grow between 2020 and 25 at a CAGR of 8.78 percent after growing at 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 is intriguing, to say the least, that the market for Indian e-pharmacies, which was previously estimated to be about $360 million (Rs 2810 crore), would increase by more than 7X between 2019 and 2023 and reach $2.7 billion (Rs 21,081 crore) by that time.

Beginnings of PharmEasy

The concept of establishing an online pharmacy was developed by PharmEasy creator Dharmil Sheth and his friend, the physician Dr. Dhaval Shah. In 2014, PharmEasy was founded mainly based on their shared belief in the potential of technology in the healthcare industry. Currently, the business offers services to over 98% of Indian pin codes.

The business sought to fulfill its purpose of providing everything linked to healthcare at customers’ doorsteps, which it is always striving to accomplish. In India, the healthcare sector has embraced digitization as a vital component. Every step in the process has been digitalized, from making an appointment with a doctor to getting results and medications delivered. A significant portion of the credit for this campaign belongs to online pharmacies like PharmEasy. Thanks to this e-pharmacies, India’s “health commerce sector” is expanding at never-before-seen rates.

PharmacyEasy’s business plan

An online pharmacy called PharmEasy operates as a three-way chain between customers, suppliers, and the delivery system. PharmEasy provides medication delivery services across Indian cities and villages. Similar to Grofers, but for medicines. To find pharmacies near clients, PharmEasy uses the pin codes it maintains. Customers may order products from PharmEasy by visiting its website or downloading its mobile app. They are eligible to discounts of up to 20% when placing an order using the mobile app, which boosts brand awareness and brings in more clients for PharmEasy.

Customers: PharmEasy is a ready-made platform where customers can look for prescription drugs or medical supplies and quickly get them online.

Suppliers: PharmEasy works with several regional pharmacies and medical supply stores, all of which assist the business in setting up its inventory and maintaining it online. In addition, the company receives payments from other pharmaceutical firms who wish to use the PharmEasy app and the internet to promote their medicines.

Channel of distribution: PharmEasy has a vast distribution network dispersed throughout the country. This makes it easier for the business to transport its items throughout India to various pin codes.

Why do individuals avoid using online pharmacies? According to research, the majority of individuals act in this way because they don’t know where their medications are coming from. PharmEasy completely exposes this myth. The business does not provide pharmaceuticals on Schedule H due to several restrictions and regulations established by the Indian government.

Investors and Funding at PharmEasy

Following a pre-IPO round of $354 million from a number of investors, PharmEasy recently received a private equity fund from VestinWolf Capital Management. The total financing given to PharmEasy to date is $1.60 billion. According to rumors from July 20, 2022, the business aims to raise around $200 million at a value between 15 and 25 percent lower than its $5.1 billion valuation from the previous year. Some common explanations for PharmEasy’s need to seek money at a lower value include market volatility, gloomy investor mood, and the financing winter.

Amanda Capital, Steadview Capital, OrbiMed, Abu Dhabi’s sovereign wealth fund ADQ, and other investors spearheaded the initial round of fundraising, which saw an investment of $204 million out of the $354 million total. Several existing angel investors and other early-stage investors, including Fundamental, Eight Roads Ventures, Bessemer Venture Partners, and others, partially exited their positions in PharmEasy during the second round of fundraising, netting the firm over $150 million. PharmEasy, preparing to submit its Draft Red Herring Prospectus (DRHP), revealed that more than 20 senior employees, five founders, and several new investors selected secondary shares at a value of $5.6 Billion. As of February 2022, the corporation is worth $5.4 billion. The business has not decided on its IPO round and won’t fix its price until SEBI has given its approval.

The firm had secured a stunning $500 million round through its Series F investment round, managed by Arokiaswamy Velumani, valuing the company at $1.8 billion in June 2021. This round saw the company raise an additional $354 million in the capital, divided into two phases, in preparation for its IPO.

PharmEasy – ESOPs

According to reports, PharmEasy was valued at $5.4 billion in February 2022. PharmEasy has chosen to reward the co-founders and workers by establishing new employee stock options (ESOPs) for them in light of the outstanding development the firm 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 get around 79,987 ESOPs. The Founders’ ESOP pool of shares is projected to be around Rs 236 crores. Additionally, PharmEasy has added new options worth Rs 356 crore to its ESOP pool for qualified workers. Six hundred three thousand three hundred three more stock shares have been added to this new ESOP pool. Additionally, PharmEasy updated its current ESOP Scheme to comply with SEBI rules.

Acquisitions – PharmEasy

The most recent business that PharmEasy purchased was Aknamed, a healthcare supply chain management firm located in Bangalore. Nicknamed will now act as a division of API Holdings Pvt Ltd, the parent company of PharmEasy. 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 generate around Rs 308 crores (or $42 million) from the parent company of PharmEasy. The top five promoters of the business, including the co-founders, allegedly sold their holdings to the corporation for a reported sum of 50.67 percent.

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 acquired three companies –

PharmEasy has purchased three businesses, including Aknamed, an organization that works to improve the efficiency of the Indian healthcare sector’s supply chain. On September 14, 2021, PharmEasy bought Aknamed. For an initial investment of Rs 308 crores ($41.90 million), PharmEasy purchased the bulk of Aknamed’s shares. In a few months, the corporation will fully acquire Aknamed for an estimated $136.04 million (about Rs. 1000 crores).

Thyrocare Technologies: Thyrocare is a fully automated diagnostic lab that prides itself on being the first of its type in India. On June 26, 2021, PharmEasy purchased Thyrocare. The purchase value is stated in a written agreement as Rs 4564 crores ($620 mn), representing the company’s acquisition of 66.1 percent ownership in Thyrocare.

Medlife – Medlife is an online pharmacy with home delivery services based in Bangalore, India. The Indian Competition Commission gave the combination of Medlife (Online Pharmacy) with PharmEasy the go-ahead on September 22, 2020. After Amazon and Reliance entered the market, it is considered the First Major Consolidation in this industry. Following the terms of the agreement, the promoters of Medlife will get a 19.95 percent ownership in PharmEasy’s Parent Entity, which will acquire 100% of the equity of Medlife. Even though the purchase discussions started in August 2020, the CCI clearance wasn’t given until September 2020. It wasn’t until May 2021, eight months after the CCI approval, that PharmEasy officially announced the merger with a competitor Medlife. Medlife stopped operating on May 25, 2021, and the PharmEasy platform entirely absorbed it. The $250 million business purchased the bulk of Medlife.

PharmEasy – Issues That Ran Into

The business began operations in 2014 and is currently a significant participant in the online pharmacy. PharmEasy, however, did not experience immediate 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 to deliver the goods. Many people were afraid of the repercussions if they uploaded their medications. Furthermore, it was difficult for PharmEasy’s delivery staff to monitor their whereabouts at the time the firm was founded. But things aren’t like that anymore. The firm finally 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 workers who spent the week working for the company’s subsidiary Docon Technologies have been allowed to go. These laid-off workers mostly worked in the sales division and came from Mumbai, Delhi, Chandigarh, Jaipur, and other cities. As part of the severance deal, PharmEasy provided the staff a two-month compensation and, according to reports, is also assisting them in finding new employment. Additionally, it was disclosed that Docon Technologies would change its name to PharmEasy One and become a standalone company, with most of its staff moving to one of API Holdings’ companies.

Acquisition of Customers for PharmEasy

A company’s ability to acquire customers depends upon trust and confidence. The amount the business gives to its clients and how those users profit are mutually beneficial. A high user retention rate attests to PharmEasy’s prowess in retaining clients. Since overcoming the early difficulties and obstacles, PharmEasy has not had any difficulties in gaining new customers.

PharmEasy – Rivalry

Tata 1Mg, Ranger Health, Medibuddy, Myra Medicines, Hello Heart, BrownPacket, and others are some of the company’s main rivals. Along with their physical locations, other hospitals and companies like Apollo Pharmacy are attempting to increase total sales via their online platforms. Most businesses featured here are working to improve their medication distribution method online. But most of them are lagging PharmEasy.

The future of PharmEasy

The healthcare startup is presently rethinking the timing of the launching of its IPO due to the market’s turbulence. PharmEasy had initially been chosen to raise around Rs 6,250 crore via a new share issuance by the end of 2021. As of February 2022, the pharmaceutical unicorn is considering this IPO round.

Disclaimer – The views and opinions expressed on this website are soley those of the original authors and other contributors.