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Pharmeasy, India’s largest online medical platform, has reportedly seen positive cash flows in April as it appears to be an effect of the company’s efforts to reduce costs and focus on turning net positive.
For those who are unfamiliar, Pharmeasy is a digital healthcare platform that offers a range of medical services. It offers home delivery of prescription and OTC medicines, assists with diagnostics tests & provides teleconsultation from trusted doctors. The 2015-founded company serves its 25 million registered consumers in more than 1,000 locations and 20,000 pin codes.
According to certain reports online, the company has achieved “double-digit crores” in adjusted EBITDA for April, as it seems the company’s efforts to cut costs are yielding positive results. However, according to the sources in said reports, this positive adjusted EBITDA figure was before the company’s repayments to its lender Goldman Sachs & non-cash ESOP expenses.
This was the first time the company managed to report a positive EBITDA since the acquisition of a 66% share in Thyrocare Tech, another major pharmaceutical startup, in early 2021. Since the successful completion of the acquisition of Thyrocare for a consideration of over Rs 4,500 crores, Pharmeasy has been unable to report positive operating cash flows.
The company was also facing issues with securing funding. The company initially had plans to go public as it had filed the DRHP with capital markets regulator SEBI in November 2021 to raise more than Rs 6,000 crores from the public. However, the company withdrew its DRHP in August 2022 due to poor market conditions and strategic considerations.
The company also launched a rights issue of Rs 750 crores late in 2022 as there were talks that the company could sell Thyrocare due to its high cash burn, but the same was rejected. The company was having a hard time raising funds due to the global tech downturn as the company had to resort to harsher steps to reduce its costs.
Customers have been moving to the traditional healthcare system of brick-and-mortar clinics as the fall in reliance on such online clinics has affected Pharmeasy adversely. Last week, the company laid off an uncertain number of employees, estimated to be close to 40% of its workforce, as a cost-cutting measure.
- Aman Agarwal
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