PharmEasy: A New Addition to the Med World

In the days where everything is switching to online mode, the medicine industries are also left no behind this web of online trend. Selling medicine online could be harmful but useful as well. Online pharmaceutical store claims of having several benefits and they also provide period delivery of medicine who need daily dose of it.

In this line only there comes PharmEasy, an E-pharmaceutical store who is delivering medicine to various parts of India.

Its History

The inception of the company dates back to 2015 when Dharmil Sheth and Dhaval Shah founded it in Mumbai with the aid of initial seed funding from their parents. The company strived to widen its reach beyond the local market, but their online pharmacies faced the hurdle of being illegal.

The initial days of PharmEasy

The inception of PharmEasy, an online pharmacy, is credited to the vision of its founder, Dharmil Sheth, and his colleague, Dr. Dhaval Shah, who recognized the immense potential of technology in the healthcare arena.

Since its establishment in 2014, the company has gained a formidable presence, catering to approximately 98% of India's pin codes. PharmEasy aims to offer doorstep delivery of all healthcare-related products, which it continues to pursue successfully.

India's healthcare sector has undergone a paradigm shift towards digitization, enabling patients to schedule appointments with doctors, receive reports, and obtain medicines through online means. E-pharmacies such as PharmEasy have played a pivotal role in effectuating this transition. As a result, India's "health commerce industry" is presently experiencing exponential growth, a trend largely attributed to the impact of e-pharmacies.

Revenue generation

PharmEasy's primary source of revenue stems from displaying sponsored results of various pharmaceutical entities on its homepage. This e-pharmacy has been leveraging advertisements quite effectively and they play a significant role in generating revenue for the business.

• The brand has adopted new-age advertising strategies that allow products, services or businesses to be advertised with minimal investments.
• Additionally, attractive discounts also contribute to the company's revenue. Apart from advertisements, PharmEasy earns commissions from its customers for healthcare products and medicines sold on the platform.
• Delivery charges levied on products also add to the company's revenue stream.
• Overall, PharmEasy has diversified its revenue streams through various channels, ensuring continuous growth and profitability.

The company has achieved impressive growth, having nearly doubled its revenue from Rs 340 cr in the past financial year to approximately Rs 737 cr in FY20. Furthermore, according to the financial reports of FY21, PharmEasy has set yet another record by experiencing a 220% increase in revenue, amounting to Rs 2,360 cr from Rs 737.4 cr in FY20.

However, as with any large-scale growth, the expenses of the company ballooned to Rs 2,980.9 crin FY21 from Rs1,084.4 cr in FY20, which marks a 147.8% increase. Unfortunately, while the company has shown significant growth in revenue, it has also accumulated losses, rising around 91% to Rs 641.3 Cr in FY21 from Rs 335.2 Cr in FY20.

PharmEasy Financials	FY21	FY20	FY19
Revenue	Rs 2,360 Cr	Rs 737.4 Cr	Rs 363 Cr
Expenses	Rs 2,980.9 Cr	Rs 1,084.4 Cr	-
Profit/Loss	Loss of Rs 641.3 Cr	Loss of Rs 335.2 Cr	Loss of ~Rs 100 Cr
EBITDA	-	-	-

PharmEasy - Strategies for Acquiring Customers

Ensuring customer acquisition is a crucial aspect of any business and is founded on trust and mutual confidence. It is an intricate rapport between how the company caters to its users and how the users benefit from the offered services.

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PharmEasy, having successfully surmounted initial setbacks and hurdles, has been seamlessly acquiring new customers. The commendable user-retention rate is a testament to PharmEasy's ability to gratify customers and maintain their satisfaction.

PharmEasy has made a strategic move by acquiring Aknamed, a healthcare supply chain management firm based in Bangalore.

- According to regulatory filings, Aknamed has agreed to sell 975,937 equity shares at a price of Rs 3,155.94 to API Holdings, Parent Company of PharmEasy, in order to raise approximately Rs 308 crores (around $42 million).

PharmEasy- 3 Companies that it has acquired

• : PharmEasy, a healthcare company dedicated to streamlining India's industry supply chain, recently made strategic acquisitions to fortify its position in the market. On September 14, 2021, the company acquired the majority stakes of Aknamed for an initial investment of Rs 308 crores ($41.90 mn). PharmEasy intends to purchase the rest of the stakes in the coming months, estimated at around Rs 1000 crores ($136.04 mn).
• Thyrocare: Prior to this, on June 26, 2021, PharmEasy secured an acquisition deal for 66.1% stakes in Thyrocare Technologies, a fully automated diagnostic laboratory and a pioneering venture in India. The acquisition was valued at an estimated Rs 4564 crores ($620 mn). PharmEasy's strategic moves reflect its commitment to enhancing the healthcare ecosystem in India.

DateDeal ValueAknamedSeptember 14, 2021$144 mnThyrocare TechnologiesJune 26, 2021$605.70 mnMedlifeMay 25, 2021$250 mn

Future Plans and Aim

PharmEasy's forthcoming plans include raising around Rs 6,250 crore through a proposed fresh issue of shares by the end of 2021. As of February 2022, the pharmacy unicorn is contemplating the possibility of an IPO round. However, given the market's volatility, the healthcare giant is reassessing the timing of its IPO launch.

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