India’s E-pharmacy segment mints its first unicorn, raises $350 million

08/04/2021

NEW DELHI, apr 7: API Holdings Pvt., one of India’s largest digital pharmacies, announced on Wednesday that it has raised $350 million from Prosus Ventures and TPG Growth LLC.
The company was valued at close to $1.5 billion, according to a person familiar with the deal, adding to a rapidly growing list of unicorn startups in the country.
The firm is already raising its next round at a valuation of about $1.8 billion, the person said, wishing to remain anonymous as the fresh round is still underway.
The Mumbai-headquartered company said it will use the funds to expand its pharmacy network and add more tele-consultations to link up customers with the 60,000 brick-and-mortar pharmacies and 4,000 doctors it already has on its books. Existing investors including Temasek Holdings Pte and CDPQ participated in the Series E round.
India’s drug distribution system is disorganized, lacking established retail chains and forcing neighborhood pharmacies to depend on thousands of middlemen as a go-between with drugmakers.
Large players like Reliance Industries, which recently acquired online pharmacy startup Netmeds, and Tata Group, which is poised to buy competitor 1MG, are making moves to enter and organize the market.
Amazon.com Inc. began supplying medicines last summer.
API provides supply chain support to pharmacies while also helping them access customers locally.
“Availability of medicines, genuineness and affordability are all wanting in the existing physical infrastructure,” said Siddharth Shah, the stathertup’s co-founder and chief executive officer, in a video conference call to discuss the funding. “Rather than create everything new, we are overlaying a digital solution on top of the existing brick & mortar stores so it’s a lot more efficient.”
He declined to disclose the valuation.
Shah, now 32, graduated from the prestigious Indian Institute of Management in Ahmedabad before dropping out halfway through an internship at Goldman Sachs Group Inc. The Goldman experience helped him realize he wasn’t cut out for a regular job, said Shah, who turned to entrepreneurship nine years ago.

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