API Holdings Pvt., One of India’s largest digital pharmacies, said on Wednesday it had raised $ 350 million from Prosus Ventures and TPG Growth LLC. The company was valued at nearly $ 1.5 billion, according to someone familiar with the deal, adding to a rapidly growing list of unicorn startups in the country.
The company is already raising its next cycle to a value of around $ 1.8 billion, the person said, wishing to remain anonymous while the new cycle is still underway.
The Mumbai-based company said it would use the funds to expand its pharmacy network and add more tele-consultations to connect customers to the 60,000 physical pharmacies and the 4,000 doctors it already has. Existing investors, including Temasek Holdings Pte and CDPQ, participated in Series E.
India’s drug distribution system is disorganized, lacks established retail chains, and forces neighborhood pharmacies to depend on thousands of middlemen as middlemen with drug manufacturers. Big players like Reliance Industries, which recently acquired online pharmacy start-up Netmeds, and Tata Group, which is on the verge of buying its competitor 1MG, are taking steps to enter and organize the market. Amazon.com Inc. started supplying drugs last summer. The API provides supply chain support to pharmacies while helping them access customers locally.
“Drug availability, authenticity and affordability are all lacking in the existing physical infrastructure,” said Siddharth Shah, co-founder and CEO of stathertup, on a conference call to discuss funding. “Rather than creating anything new, we’re layering a digital solution on top of existing physical stores to make it much more efficient.”
He declined to disclose the assessment.
Shah, now 32, graduated from the prestigious Indian Institute of Management in Ahmedabad before dropping out halfway from an internship at Goldman Sachs Group Inc. The Goldman experience helped him realize that he was not cut out for a regular job, said Shah, who turned to entrepreneurship nine years ago.
India’s archaic pharmaceutical supply chain of more than 1,000 manufacturers, 55,000 distributors and sub-distributors and more than 800,000 pharmacies is poised for disruption.
API, operating under the consumer brand PharmEasy, helps digitize and organize drug supply chains to provide rapid access to drugs. It also assists with sourcing, delivery and logistics, and provides credit to retailers. It currently supplies 200,000 products to more than 3,000 drug manufacturers. With the latest round of funding, the startup is targeting more than 100,000 pharmacies in 100 cities over the next 12 months and more than 20 million patients per year.
“It’s a huge space and startups have a chance to disrupt current inefficiencies,” Ashutosh Sharma, India investment manager at Prosus Ventures, said at the same call. “Only local founders can build for the next 500 million customers, it can’t be a Western approach.”
(Except for the title, this story was not edited by The Bharat Express News staff and is posted Platforms.)