Indian online pharmacy startup PharmEasy has informed its existing investors that it plans to raise about $300 million shortly in a new round of funding at a 90% markdown from the previous valuation, a person familiar with the matter said. Should PharmEasy secure the new funding, its valuation will be notably lower than the total capital it has managed to raise over the years.

PharmEasy, one of India’s largest pharmacy firms, is racing to raise the new capital to pay its lender Goldman Sachs, the person said. PharmEasy borrowed about $285 million from Goldman Sachs last year to pay off an earlier debt to move ahead with a majority stake acquisition of Thyrocare for over $600 million.

The firm, which offers a range of services including tools and information on wellness, consultations, diagnostic and radiology tests and treatment deliveries, had filed for a $843 million IPO in November 2021, but later deferred the plan.

Indian newspaper Economic Times first reported the development, while Moneycontrol said separately that healthcare group Manipal was looking to lead the $300 million funding into the startup.

API Holdings, the parent firm of PharmEasy, was valued at over $5 billion in its most recent funding round in the second half of 2021.

The startup plans to raise new financing through a rights issue that would value the price of its share at 5 Indian rupees, down from 50 earlier, Economic Times reported, citing internal documents.

At the proposed terms, if the round materializes, PharmEasy will see its valuation plummet to about $500 million to $600 million. The startup has altogether raised over $1.1 billion against equity and in debt. It will also become the first major Indian unicorn to raise a down round.

PharmEasy has been looking to raise a new round for several quarters, but has struggled to find a taker at even $2 billion valuation, TechCrunch reported earlier. The company did not respond.

The firm counts TPG, Prosus, Temasek, B Capital, Bessemer Venture Partners, Eight Roads Ventures, Steadview Capital and JM Financial among its backers.

PharmEasy, once valued at over $5 billion, seeks new funding at a 90% valuation cut by Manish Singh originally published on TechCrunch