PharmEasy, the Mumbai-based e-pharmacy startup, achieved an operating revenue exceeding INR 6,000 Crores in the fiscal year ending on March 31, 2023. The unicorn reported an operating revenue of INR 6,643.9 Crores in FY23, marking a 16% increase from the previous fiscal year’s INR 5,728.8 Crores.
Established in 2015 by Dharmil Sheth, Dhaval Shah, Harsh Parekh, Siddharth Shah, and Hardik Dedhia, PharmEasy specializes in online medicine sales and provides diagnostic tests through its subsidiaries. The primary source of revenue for the startup is the sale of medicines on its platform. In FY23, PharmEasy generated INR 5,925.3 Crores through pharmaceutical and cosmetic product sales and INR 701.2 Crores through diagnostic and other services. In comparison, FY22 saw INR 5,229.9 Crores from medicine sales and INR 417.8 Crores from diagnostic and other services.
When considering other income, the total revenue for the startup reached INR 6,699.7 Crores, a 15% rise from INR 5,781 Crores in the previous fiscal year. However, the net loss increased by over 31%, reaching INR 5,211.7 Crores in FY23 from INR 3,992.4 Crores in FY22, primarily due to an impairment loss of INR 2,921.9 Crores during the year under review. Excluding the impairment loss, PharmEasy’s net loss decreased by 16% to INR 2,289.8 Crores in FY23 from INR 2,731.7 Crores in FY22.
The total expenditure for the startup increased by a modest 6%, reaching INR 8,974 Crores from INR 8,491.5 Crores in FY22. Key expenditure areas include procurement cost, employee benefit expenses, and marketing cost. Procurement cost constituted approximately 63% of the total expenditure, rising by 12% to INR 5,730.8 Crores in FY23 from INR 5,113 Crores in the previous year. PharmEasy managed to reduce employee costs by 12% to INR 1,283.3 Crores in FY23 from INR 1,458.9 Crores in the previous fiscal year, which involved several rounds of layoffs in 2022 and 2023. The startup also lowered its marketing cost by over 50% to INR 235 Crores in FY23 from INR 494 Crores in FY22.
PharmEasy faced financial challenges in 2022 but successfully raised INR 3,500 Crores (around $424 million) in a rights issue, providing relief. The funds raised are intended to settle a portion of the company’s debt. PharmEasy has been working to repay debt raised from Goldman Sachs, having breached loan covenant terms within a year of obtaining high-cost debt. The startup had taken the debt to pay off previous debt used for acquiring Thyrocare.
Despite these challenges, PharmEasy appointed Yatharth Bhargova as the new group CFO of its parent entity, API Holdings Private Limited, in 2022. PharmEasy has raised approximately $1 billion in capital to date, with backers including B Capital, Temasek, Eight Roads Ventures, Prosus, and Bessemer Venture Partners. In the online pharmacy market, PharmEasy competes with Tata 1mg, MediBuddy, and Practo.
