PharmEasy, an Indian platform offering medical services and drugs, has reportedly laid off employees as it struggles to secure funds amid a slowdown. According to sources familiar with the matter, the company has been downsizing its workforce across multiple departments, including technology, design, sales, operations, logistics, and procurement. Although the exact number of impacted employees is unclear, one source suggested that as much as 40% of the workforce may have been affected. This move comes as the company faces challenges in raising funds, leading to cost-cutting measures.
As per the sources mentioned earlier, some employees at PharmEasy were reportedly laid off due to performance-related concerns, in addition to cost-cutting measures and insufficient funding. The company allegedly communicated to many affected staff members that the layoffs were due to financial constraints. However, these reports suggest that certain employees were let go due to underperformance.
PharmEasy had announced in August of last year that it would raise funds through a rights issue involving its existing shareholders after withdrawing the draft red herring prospectus (DRHP) for its initial public offering (IPO). The IPO was expected to collect around Rs. 3,000 crore to Rs. 3,700 crore, but the company cited “market conditions and strategic considerations” as the reasons for its withdrawal.
In November of last year, PharmEasy secured an undisclosed amount of debt financing from EvolutionX Debt Capital, a platform that provides financing to growing businesses. Since its founding in 2014, the drug and medical services platform has raised more than $1.12 billion in funding through 16 investment rounds, with support from investors such as Temasek, B Capital, Prosus, Steadview Capital, and Nandan Nilekani’s Fundamentum Partnership. The company was valued at over $5 billion in its most recent funding round in October 2021.
PharmEasy, an Indian medical services and drug platform, reportedly laid off staff in December due to challenges in raising funds amidst a slowdown. According to Entrackr, the startup’s annual losses in fiscal year 2022 increased by 4.3 times to Rs. 2,731 crore, and its cash outflows from operations also rose by 3.2 times to Rs. 2,589 crore. While the exact number of affected employees is unknown, the company has been letting go of workers in various departments, including logistics, procurement, operations, sales, design, and technology. Reports suggest that some employees were let go due to performance-related issues. Earlier this year, the firm’s CFO, Chebolu V Ram, resigned and joined Entero Healthcare, a healthcare supply chain services company.
In the current economic climate, fund managers are increasingly turning their attention from the healthtech sector to traditional healthcare sectors such as hospitals, leading to difficulties in raising funds for companies such as PharmEasy. With consumers now preferring physical clinics over virtual consultations, which were popular during the pandemic, the healthtech sector has seen a decline in investment. As a result, PharmEasy has implemented cost-cutting measures such as employee layoffs.