Is All Shark deal Investment Pharmallama out of business?

• Founder: Arjun Raghunandan, Achintya Dayal and Deepesh Rajpal
• Business: A smart medicine box
• Ask: ₹ 1 Crore for 1.5% Equity
• Valuation/Net worth: ₹ 66.6 Crores
• Result: ₹ 2 crores for 5% Equity
• Sharks: Namita Thapar, Aman Gupta, Anupam Mittal, Amit Jain and Peyush Bansal
• Episode: Season 2 Episode 39

Pharmallama Shark Tank Pitch:

Pharmallama is a provider of smart pill boxes with the aim of revolutionizing traditional medicine storage in Indian households by offering an organized and efficient solution. Their smart pill box is designed to provide pre-arranged, sequenced sets of medication as per a doctor’s prescription, complete with an easy dispensing mechanism. Pharmallama also offers an accompanying app to help users track their medication and connect with healthcare experts. They launched in April 2022 and have already assisted more than 5,000 families.

They successfully raised ₹5 Crore through a transaction with one of the world’s largest packaging companies, ACG Pam Pac, in which they diluted 50.9% of the company. ACG became a strategic investor in Pharmallama, and intellectual property is shared through a joint MOU between the founders and ACG. Each machine costs ₹1.34 Crores, and their packaging costs are as low as ₹20 per order. Their pharmacy currently sells medicine at the maximum retail price (MRP). Pharmallama have plans to sell it below MRP at scale. The customer acquisition cost is ₹900, and the average order value is ₹1400. Company also have a commendable retention rate of 91% over five months.

In terms of financial performance, Pharmallama generated revenue of 17 lakh in FY 21-22 and an impressive 85 lakh in just the first five months of FY 22-23. They are experiencing a month-on-month growth rate of 100%, with 24 lakhs in sales last month. Additionally, they have received a termsheet from one of India’s largest e-commerce companies, rumored to be Flipkart. Pharmallama is currently in the process of raising a larger funding round with a minimum valuation of 45 Crores through a convertible note.

Pharmallama Shark Tank Negotiations:

After their appearance on Shark Tank India, Anupam initially offered ₹1 Crore for 2.22% equity. However, Peyush suggested a collaborative approach, and all the “sharks” joined forces, presenting a combined offer of ₹2 Crore for 5% of the company. Pharmallama initially countered with 5%, which the sharks rejected. Ultimately, they accepted the deal at a 5% equity share. Peyush commented that Pharmallama was his favorite among all the pitches on Shark Tank India.

What Happened to Pharmallama after Shark Tank India?

Our research has revealed that the deal with the sharks closed successfully, and the company was thriving. In July 2023, the company shared that they had dispatched over 3 lakh medicines.

However, their journey has not been entirely smooth, as the Delhi Chemists Association issued a legal notice to the e-pharma startup Pharmallama. The association claimed that running an e-pharmacy is against Indian laws, with no existing regulations allowing the repackaging of medicines.

They sent a letter addressing the founders of the startup and the Health Ministry, asserting that Pharmallama’s operations are illegal and should be shut down in the public interest. After this there have been no updates on the matter. Pharmallama’s social media channels have gone quiet as of July 2023. This suggests that the company may be facing legal battles or encountering business challenges. In December 2023, Medianama confirmed that the company has indeed shut down and seized their operations.

Here are other companies from Season 2 Episode 39.