Janus Henderson Marks Down PharmEasy's Valuation By Half To $2.8 Bn

Janus Henderson has marked down the valuation of API Holdings, the parent firm of medical services firm PharmEasy, by half to around $2.8 billion, marking the second such action by a US investor for the Indian start-up.

Janus Henderson bought a stake in PharmEasy in 2021 and reduced the valuation of its holding as of December 31, 2022, according to filings with USA's Securities and Exchange Commission (SEC) in April this year. PharmEasy is the latest instance of large Indian start-ups facing valuation markdown by investors amid a funding winter and macroeconomic uncertainty.

PharmEasy, in October 2021, raised $350 million in a pre-IPO round valuing the Mumbai-based company at $5.6 billion. The primary funding worth $205 million was secured from new investors, including US hedge fund Janus Henderson, Abu Dhabi-based sovereign wealth fund ADQ, New York hedge fund Neuberger Berman, Hong Kong hedge fund ApaH Capital, London’s Sanne Group, Singapore-based Amansa Capital, OrbiMed and Steadview Capital.

In 2021, PharmEasy raised about $140 million through a secondary share sale, taking its post-money valuation to $5.6 billion. PharmEasy’s valuation crossed $4 billion after it acquired a majority stake in Thyrocare Technologies in June 2021.

Funds managed by US-based investment management firm Neuberger Berman recently marked down by 21 per cent the valuation of the shares they hold in API Holdings. The same funds reduced API Holdings’ valuation to $4.4 billion from $5.6 billion.

PharmEasy has total funding of $1.6 billion from investors such as Prosus Ventures and Temasek. In August last year, API Holdings said in August last year it had decided to withdraw its draft red herring prospectus (DRHP) filed with the Securities and Exchange Board of India (Sebi). It cited volatile market conditions and ‘strategic considerations’. The DRHP was filed on November 9, 2021.

API Holdings reported a net loss of Rs 3,992 crore for FY22 against Rs 641 crore in FY21 (2020-21), as per RoC filings by the company with the Ministry of Corporate Affairs.

API Holdings, the parent entity of PharmEasy, is a digital healthcare platform that competes with companies such as 1mg, Netmeds, Flipkart Health+ and Amazon Pharmacy.

The firm has now reportedly recorded a positive EBITDA (earnings before interest, taxes, depreciation, and amortisation) in April this year of about Rs 14 crore for the first time since its inception with a net revenue of Rs 600 crore. The company has reportedly told the board that it was planning to have a positive cash flow by September this year. As part of that strategy, the company is looking to cross-sell more services on the platform.

A number of technology companies are facing valuation markdowns and steep losses, prompting them to lay off employees amid a funding winter and macroeconomic uncertainties.

US-based investment management firm Vanguard Group has marked down the valuation of ANI Technologies, the parent company of ride-hailing firm Ola, by about 35 per cent to $4.8 billion from $7.4 billion, according to regulatory filings with the US’ Securities and Exchange Commission (SEC).

Valuation markdowns

US investment firm Invesco, which led Swiggy’s previous funding round, has marked down the food delivery firm’s valuation by 33 per cent from $8.2 billion to about $5.5 billion. In January last year, Swiggy raised $700 million in Invesco-led funding, which made the outfit a decacorn, almost doubling its valuation to $10.7 billion.

US-based asset manager BlackRock has reduced the valuation of Byju’s by about 50 per cent to $11.5 billion. This is a sharp decrease from the $22 billion at which the edtech decacorn was valued at in 2022.