Dharmil Sheth, Dhaval Shah, Harsh Parekh and Hardik Dedhia, co-founders of API Holdings, the company that runs PharmEasy, will quit the firm, sources aware of the development told Moneycontrol.
Sheth and Dhaval Shah started PharmEasy in 2015 as an online medicine delivery company. In 2020, PharmEasy merged with Ascent Health, one of the largest offline pharmaceutical distribution companies, to form API Holdings.
Since then, Dharmil Sheth, Dhaval Shah (co-founders of PharmEasy) ran API Holdings along with Harsh Parekh, Hardik Dedhia and Siddharth Shah (co-founders of Ascent Health).
Now, more than four years after the merger, most of the co-founders are leaving the company, sources said. Siddharth Shah, the last remaining co-founder, will, however, continue to be associated with the company, they added.
“The transition of Dharmil, Dhaval, Harsh and Hardik has been in the works since around the time PharmEasy raised its last round in April 2024. Siddharth will remain and lead the company as CEO,” one of the persons cited above told Moneycontrol.
The founder group cumulatively holds under 2 percent in API Holdings, according to PrivateCircle Research, a private market intelligence platform. Each of the five co-founders held between 0.20 percent to 0.30 percent stake in the company.
PharmEasy did not reply to Moneycontrol’s email seeking details. It was not immediately clear where the four are headed next.
The company’s last funding round, in April last year, was the most momentous one in the firm’s history as it turned its fortunes. In 2023, the company breached covenants after taking on a $300 million loan from Goldman Sachs. Since then, the company struggled to repay its debt which made the going even tougher.
It had taken on loans to fund the $600 million acquisition of Thyrocare in 2021, a company that runs a chain of diagnostic centres.
While PharmEasy eventually managed to raise money in 2024, the capital infusion happened at a massive discount.
When the Mumbai-based company raised $216 million in April 2024 from Ranjan Pai's Manipal Education and Medical Group (MEMG) and other existing investors such as Prosus, Temasek, and 360 One, it saw its valuation reduce drastically by around 90 percent.
PharmEasy, which was valued at $5.6 billion during its peak in 2021, saw its valuation being slashed to around $700 million when it raised money in April 2024.
The valuation markdown did not stop there.
Around September last year, Janus Henderson, the global asset firm, which is an investor in the company, had reportedly said PharmEasy is now worth $458 million, a haircut of 92 percent. That is less than half the capital the company has raised. Since inception, the company has raised over $1 billion from TPG, B Capital, Think Investments, Abu Dhabi-based ADQ and several others.
The markdowns came years after the startup delayed its plans to go public following the filing of draft papers with the Securities and Exchange Board of India (SEBI) for an $843 million IPO.
The firm filed DRHP in November 2021 and pulled back its listing plan in August 2022 citing tough market conditions. While CEO Shah has expressed plans to go public, he has not provided a timeline.
In FY24, the company saw its revenue fall 15 percent year-on -year to around $660 million (Rs 5,664 crore) while losses narrowed 51 percent YoY to around $300 million as the company reduced expenses to improve its profit profile.
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