New PharmEasy funding round 'sudden death' for founders: Ashneer Grover
Jul 6, 2023, 14:14 IST
New Delhi, Former BharatPe Co-founder Ashneer Grover on Thursday claimed that the new funding round by the beleaguered unicorn PharmEasy is not a "down round" but actually the end and will bring "sudden death" for the company's founders owing to the anti-dilutive clause.
According to an earlier TechCrunch report citing sources, PharmEasy, which was once valued at $5 billion, plans to raise nearly $300 million at "a 90 per cent markdown from the previous valuation". PharmEasy will see its valuation nosedive to about $500-$600 million.
Reacting to the report, Grover tweeted: "Down Round + Anti-Dilutive Clause = Sudden Death (Jhatka) for the Founders!" He said that if this news about PharmEasy is correct, it's not a down round but the end.
Explaining his argument, Grover said that since the anti-dilutive clause will kick in, it means that "VC investors who invested in PharmEasy at more than Rs 5/share ever will get more shares so their holding cost comes to Rs 5/share"."Simply even last round VC investors who invested at Rs 55/ share will get 10x more shares for free so their holding comes to Rs 5/share. Everyone but the founders and Employees," he posted.
According to Grover, founders along with ESOP holding will become 0.001 per cent or some similar fraction at the company."Debt taken in 2021 will turn out to be the most expensive capital raised by founders ever," he further said.
Multiple reports on Wednesday said that online pharmacy startup PharmEasy which, according to multiple reports, is in deep crisis amid sharp valuation cut as it seeks new funding.
The reports claimed that PharmEasy is raising fresh funds to pay its lender Goldman Sachs from which it borrowed nearly $285 million last year as it took a majority stake in diagnostics solution provider Thyrocare for over $600 million.
Money Control first reported that Manipal Group has expressed interest in investing approximately Rs 1,000 crore for an 18 per cent stake in API Holdings, the owner of online pharmacy PharmEasy and promoter of Thyrocare."Furthermore, existing investors of API Holdings are expected to contribute approximately Rs 1,500 crore in a funding round led by Manipal Group," said the report.--IANSna/dpb
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According to an earlier TechCrunch report citing sources, PharmEasy, which was once valued at $5 billion, plans to raise nearly $300 million at "a 90 per cent markdown from the previous valuation". PharmEasy will see its valuation nosedive to about $500-$600 million.
Reacting to the report, Grover tweeted: "Down Round + Anti-Dilutive Clause = Sudden Death (Jhatka) for the Founders!" He said that if this news about PharmEasy is correct, it's not a down round but the end.
Explaining his argument, Grover said that since the anti-dilutive clause will kick in, it means that "VC investors who invested in PharmEasy at more than Rs 5/share ever will get more shares so their holding cost comes to Rs 5/share"."Simply even last round VC investors who invested at Rs 55/ share will get 10x more shares for free so their holding comes to Rs 5/share. Everyone but the founders and Employees," he posted.
According to Grover, founders along with ESOP holding will become 0.001 per cent or some similar fraction at the company."Debt taken in 2021 will turn out to be the most expensive capital raised by founders ever," he further said.
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The reports claimed that PharmEasy is raising fresh funds to pay its lender Goldman Sachs from which it borrowed nearly $285 million last year as it took a majority stake in diagnostics solution provider Thyrocare for over $600 million.
Money Control first reported that Manipal Group has expressed interest in investing approximately Rs 1,000 crore for an 18 per cent stake in API Holdings, the owner of online pharmacy PharmEasy and promoter of Thyrocare."Furthermore, existing investors of API Holdings are expected to contribute approximately Rs 1,500 crore in a funding round led by Manipal Group," said the report.--IANSna/dpb