Pharmeasy hasn’t had an easy time in recent years, and most of its co-founding team is now parting ways with the company.
Four of the five PharmEasy co-founders are set to leave the company, Moneycontrol reports. Co-founders Dharmil Sheth, Dhaval Shah, Harsh Parekh and Hardik Dedhia will quit the firm. The fifth co-founder, Siddharth Shah, will continue to be associated with the company.
The co-founder exodus at PharmEasy is a stunning reversal for the company, which had been riding high until just a couple of years ago. PharmEasy had become a unicorn with a valuation of $1.5 billion in April 2021. In June 2021, it had acquired a 66 percent stake in listed lab testing company Thyrocare for Rs. 4,546 crore, which was the first instance of an Indian startup acquiring a stock-market-listed company. In October 2021, PharmEasy had raised funds at a valuation of $5.6 billion, effectively nearly quadrupling its valuation over a frenetic 6 months. PharmEasy had even filed a draft prospectus with SEBI to list on the public markets in November 2021.
But PharmEasy found itself competing fiercely on the ground with companies like Tata-owned 1mg and Relinace-owned Netmeds, which had deep pockets and wanted to dominate the online pharmacy market. In February 2023, an investor had marked down PharmEasy’s valuation to $4.4 billion, and in May 2023, another investor had marked it down to $2.8 billion. It also pulled out of its IPO. But in July 2023, it had been reported that PharmEasy was unable to pay off the loans it had taken to acquire Thyrocare, and was being forced to raise funds at a discount of 90 percent of its original valuation. PharmEasy finally raised money in 2024 with a 90 percent haircut to its valuation.
This has likely meant that there isn’t much upside left even for the founders, and four of them are leaving the company. The four founders collectively owned 2 percent of the company. One of them, Dharmil Sheth, had co-founded PharmEasy in 2015 with Siddharth Shah. The other three — , Dhaval Shah, Harsh Parekh and Hardik Dedhia– had become “co-founders” after PharmEasy had merged with their company Ascent Health in 2019.
There have been several instances of co-founders leaving their own companies in the Indian startup space. Two of the three ShareChat co-founders had quit in 2023 after the company had run into some trouble with layoffs, and Sandeep Agarwal had left ShopClues under dramatic circumstances, and the company was eventually sold in a fire sale. Some companies, though, have managed to do well even after the exits of their co-founders — Zomato co-founder Pankaj Chaddah had quit in 2018, but Zomato has gone from strength to strength since then, and Ola co-founder Ankit Bhati had quit the company in 2019. But having four of the five co-founders quit in one go might be a first for the Indian startup ecosystem, and with PharmEasy already staring at a 90 percent cut, existing co-founder Siddharth Shah could find it challenging to affect a turnaround at one of the pioneers of India’s online pharmacy space.