PharmEasy, a startup in the online medicines order and delivery segment is likely to be funded by Japan’s SoftBank to the extent of $100 million. Though the development is yet to be officially confirmed by either PharmEasy or SoftBank, it appears that talks are already underway and it may not be long before the announcement comes through.
It may be relevant to point out that the traditional brick & mortar medical stores have gone to court and have obtained an order that bans online pharmacy services. But the High Court of Madras has lifted this ban. The original order was issued by the Delhi High Court. This uncertainty has not prevented PharmEasy or the other players in the online medicine business from going slow or stopping their activities. In fact, PharmEasy has had a four-fold jump in revenue year-on-year!
If this $100 million-dollar funding goes through, it might see the valuation of the startup doubling from around the $200 million mark to $400 million. At least, that is what PharmEasy would want the investors to look at. The firm has raised around $75 million so far, including the last Series C funding of $50 million by a clutch of investors led by Eight Roads Ventures India. The others to pick up a stake in that round were Fidelity International Ltd and Bessemer Venture Partners.
The legal issue in question relates to the absence of any regulatory legislation in place for the pharmacies to operate. The objections being raised by the offline pharmacies are that while their businesses are subject to a host of checks and balances, nothing of that kind exists with the online ventures. There are restrictions on obtaining licences, storing and selling certain scheduled drugs without valid prescriptions. The pharmacies are subject to periodic inspections by the Drug Controller’s Office to ensure no expired or near expiry stocks are being held and so on. They insist on all these conditions being imposed on the online pharmacies too. The next question would be how the government will implement many of these conditions.
The sector in general and PharmEasy in particular, will be closely watched in the coming weeks and months.