The global investor, which picked a stake in PharmEasy in September 2021, has reduced the valuation of its holding in the firm by half, which would translate to an approximate valuation of around $2.8 billion as of December 31, 2022.
The filings were made last month.
ET had reported earlier that funds managed by Neuberger Berman, a New York-based investment management firm, marked down PharmEasy’s valuation by 21% to $4.4 billion as of February 28, when compared to its last fundraise valuation.
ETtechTop internet firms like edtech firm Byju’s, food and grocery delivery firm Swiggy, fintech Pine Labs, ride-hailing firm Ola and others have seen their respective investors correcting valuations in these firms, as reported by ET.
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The Temasek-backed epharmacy was valued at $5.6 billion when it closed its last funding round of nearly $350 million in October 2021, which saw investments from Singapore’s Amansa Capital, Blackstone-backed hedge fund ApaH Capital, Janus Henderson and others.
PharmEasy, which raised over $1 billion, including venture debt, in 2021, had seen its valuation grow manifold to $5.6 billion, up from a $1.5 billion in April 2021. Incidentally, Neuberger Berman also marked down the valuation of fintech company Pine Labs in its books by 38%– as of February 28,2023– to $3.1 billion.
An emailed query sent to PharmEasy went unanswered till the time of publishing.
The consumer Internet investment ecosystem in India has been witnessing a series of valuation markdowns by US institutional investors.
These developments follow other crucial moves by startups and investors such as layoffs, holding back on investments and broader cost-cutting in a sluggish macroeconomic environment.
US institutional investors and the funds managed by them review the value of their holdings at regular intervals. Venture investors have recently told ET that while the exercise of marking down valuation in books was theoretical, it could be a signal that startups would raise funds at lower valuations going forward.
PharmEasy, which deferred its IPO last year, was struggling to raise fresh funds amid a broader tech downturn. ET reported in February that PharmEasy’s cash runway had shrunk to about a year based on its December burn rate.
Cash burn is typically used for privately held unprofitable startups and indicates the rate at which it uses capital to run day-to-day operations. PharmEasy was on a Rs 5,200 crore revenue as of December 2022, with a cash burn of Rs 30 crore per month.
In January, the epharmacy’s cash burn narrowed to Rs 15 crore, indicating its intent to further improve its economics.