Startup Deep Dive : Medlife — The e-pharmacy that lost more than it earned, then became a fifth of PharmEasy

In March 2019, Medlife told the press it was running at an annual revenue run rate of more than ₹1,000 crore. Its audited accounts for the year that ended that very month show operating revenue of ₹363.4 crore (about $37.9 million) and a net loss of ₹403.6 crore, as per filings reported by Entrackr in January 2020. The company lost more money than it earned, and it kept saying it was the market leader.

Two years later, on 25 May 2021, the Medlife app stopped taking orders and its customers woke up as PharmEasy users. The founders’ family trust, which had bankrolled almost every rupee of Medlife’s growth, walked away with a stake of up to 19.59% in API Holdings, PharmEasy’s parent, as per the Competition Commission of India’s approval of September 2020. This is the story of how a pharma dynasty’s e-pharmacy bet became a fifth of a rival, and why that was the best available outcome.

Quick facts

What Medlife did

Medlife sold prescription and over-the-counter medicines online to Indian households, holding its own stock in warehouses rather than routing orders to partner chemists. Around that core it bolted on home-collected diagnostic tests through Medlife Labs, doctor tele-consultations, a private-label range of generics and OTC products, and a small network of franchise stores. By the time it was sold in May 2021, PharmEasy said Medlife had served customers in more than 465 cities (The Week, May 2021), and the CCI described it as a company that “engages in wholesale sale and distribution of drugs” as well as online retail and digital consultations (CCI order, September 2020).

The origin

Tushar Kumar did not come to pharmacy from the outside. He is from the family that built Alkem Laboratories, one of India’s largest drug makers, and had a brief stint in the family business before starting Medlife, as per Inc42’s April 2018 profile. The founding insight he described to Inc42 was about fragmentation: an Indian patient sees a doctor in one place, hunts for the prescribed brand across several chemists, and travels again for a blood test. He recalled walking long distances to buy medicines for his parents. Medlife’s promise was to fold pharmacy, lab and consultation into one app.

The second founder, Prashant Singh, co-ran Tulip Lab Private Limited with Kumar, a contract manufacturer that later made some of Medlife’s private-label products alongside Alkem (Inc42, April 2018 and April 2019). The company launched in November 2014 with what the founders described as an initial $15 million, followed by about $30 million more from family capital and promoters. That detail matters: Medlife was never a venture-capital startup in the usual sense. It was a family-funded operating company with a startup’s growth ambition, and the way it raised money later would follow directly from that.

The bet was inventory-led. Where PharmEasy started as a marketplace connecting customers to neighbourhood pharmacies, Medlife bought stock, warehoused it and shipped it. That gave it control over fill rates and margins, but it also meant every new city needed working capital, a licensed premises and staff before the first order arrived.

The struggle years

The first blow was legal. On 12 December 2018, a Delhi High Court bench of Chief Justice Rajendra Menon and Justice V. Kameswar Rao passed an interim order restraining the online sale of medicines across India, on a petition by dermatologist Dr Zaheer Ahmed, who argued that e-pharmacies were operating without licences under the Drugs and Cosmetics Act, 1940 (S.S. Rana & Co, December 2018). The government’s draft e-pharmacy rules of August 2018 were never notified. Medlife, like its rivals, kept operating under the licences of its physical pharmacies, but the sector spent 2019 and 2020 with no settled law on whether its core activity was legal.

The second problem was the gap between the numbers Medlife announced and the numbers it filed. In November 2018, Kumar told PTI the company expected to close the fiscal at ₹830 crore and to do “around Rs 3,000 crore of revenue next fiscal year” (India.com, November 2018). In April 2018 the target for FY19 had been ₹900 crore (Inc42). The audited FY19 result was ₹363.4 crore of operating revenue. The “₹1,000 crore run rate” line kept appearing in press releases through 2019 and 2020, but no filed accounts ever showed revenue near it. Entrackr’s reading of the books put the cost of that growth plainly: Medlife spent ₹2.1 for every rupee of operating revenue in FY19, and net cash outflow from operations was ₹425.1 crore.

The third problem was that outside investors would not sign. Entrackr reported in September 2019 that Medlife was in parallel talks to raise about $150 million; none of it closed. In May 2020 it was seeking up to $50 million, again without result (Entrackr, August 2020). The consequence was a balance sheet that, by the end of FY20 on an unaudited basis, had a negative net worth of ₹157.7 crore, negative working capital of ₹97.6 crore and outside liabilities of ₹473.6 crore against total assets of ₹316 crore, as per the same report. The company’s response to Entrackr was that brand and technology spending had helped it “cement a leadership position” and add more than a million new customers in FY20.

The fourth was the lockdown. When India shut down on 25 March 2020, e-pharmacies were declared essential and orders rose three to six times, but Medlife’s deliveries fell by about 60% because supply from distributors stalled and delivery staff could not reach work; CEO Ananth Narayanan publicly asked state governments to let documented delivery personnel through (The News Minute, March 2020). Demand had never been higher, and the company could not fulfil it.

The turning point

The single event that decided Medlife’s fate was not a funding round but the Competition Commission of India’s approval, on 22–23 September 2020, of API Holdings’ acquisition of 100% of Medlife International Private Limited, with Medlife’s promoter shareholders and other shareholders receiving up to 19.59% of API Holdings on a fully diluted basis (CCI, via PIB and Affairscloud, September 2020). It was the first big consolidation in Indian e-pharmacy, and it came weeks after Reliance’s August 2020 purchase of a majority of Netmeds, the deal that made it clear independents would be squeezed (Entrackr, August 2020).

The numbers on each side of that line tell the story. On the Medlife side: an unaudited FY20 revenue of ₹1,142.4 crore, an FY20 loss of ₹533.1 crore, an EBITDA margin of minus 42%, no external equity investor in six years, and a valuation that Entrackr reported at about $375 million as of 31 January 2020. On the deal side: a stake reportedly worth $235 million on a combined enterprise value of about $1.2 billion (Entrackr, September 2020), or $240 million (Inc42, May 2021), with media reports of $200–250 million when the filings were made in August 2020. PharmEasy, by contrast, had filed FY20 revenue of ₹637 crore and a pre-tax loss of ₹100.7 crore (Inc42, May 2021): roughly half Medlife’s claimed revenue, one-fifth of its loss.

Between approval and close, the merged company’s fortunes moved fast. API Holdings’ own timeline dates the Medlife acquisition to January 2021, and in April 2021 PharmEasy raised a $323 million Series E at a $1.5 billion valuation (Inc42, May 2021). On 25 May 2021, Medlife discontinued operations. Users were told to log in to PharmEasy with the same phone number; digitised prescriptions and addresses from the past year moved across, wallet balances had to be withdrawn manually, and Medcash expired on 23 May (The Week and PharmEasy blog, May 2021). PharmEasy co-founder Dhaval Shah said the combination made it the “largest healthcare delivery platform across the country by a distance”, serving more than 2 million families a month.

The money behind it

Medlife’s funding shape is unusual for an Indian consumer internet company of its size: almost all of it came from the founders’ own family vehicle, and a growing share of it was debt.

• 2014–2018, company-stated: an initial $15 million, then about $30 million from family capital and promoters (Inc42, April 2018).
• February–March 2019: ₹118.95 crore (about $17 million) in equity from the Prasid Uno Family Trust at ₹14,440 per share, as per RoC filings (Inc42, April 2019). Prasid Uno is Tushar Kumar’s family trust; Kumar is a director and trustee, and Prashant Singh’s wife Surabhi Singh is a director (Entrackr, September 2019). The same trust sold 36 lakh Alkem shares for ₹1,708.45 crore that year, which is where the money came from.
• May–July 2019: ₹55 crore of loans from the trust with conversion options (Entrackr, September 2019).
• September 2019: approval to raise up to ₹400 crore of convertible debt from Prasid Uno; the August 2020 filings describe a loan agreement for a maximum advance of ₹400 crore at 10.5% a year (Entrackr, September 2019 and August 2020).
• December 2019: ₹110 crore ($15.5 million) of secured non-convertible debentures, 110,000 NCDs of ₹10,000 face value, subscribed by Wilson Global Opportunities Fund (Inc42, December 2019).
• March 2020: board approval for ₹155 crore in credit facilities from Hero Fincorp, convertible into equity over three years (Inc42, May 2020).
• February–July 2020: ₹173 crore, of which about ₹167 crore was optionally convertible redeemable preference shares taken by Prasid Uno at ₹100 face value plus ₹11,754 premium, and ₹5 crore was NCDs issued to SC Credit Fund (Inc42, July 2020).

Inc42 put Medlife’s total disclosed funding at $56.5 million at the time of the merger, a figure that counts equity and excludes most of the trust’s debt lines. What each backer changed is clear. The family trust kept the lights on and set the tempo; because it converted debt to preference shares in August 2020 (₹173 crore worth), it also held the paper that turned into the API Holdings stake. Wilson Global and Hero Fincorp were signals that outside money would lend, but not buy equity, at the valuation the founders wanted. The absence that defined the company was any venture or private-equity round in six years of operation.

How it made money

Medlife was a retailer, not a platform, and its economics were a retailer’s.

• Money in: sale of medicines and health products from owned inventory, which was 88% of FY19 operating revenue at ₹318.5 crore; lab tests and consultations brought in ₹44.84 crore (Entrackr, January 2020). Diagnostics ran through its own central laboratory and home sample collection.
• Discount as the customer hook: Kumar told PTI in November 2018 that Medlife discounted about 15% off MRP where competitors gave around 20%, and claimed a 70% repeat rate (India.com, November 2018).
• Costs out, FY19 (Entrackr): stock purchases ₹349 crore, advertising ₹128 crore (up from ₹35 crore in FY18), employee benefits ₹107.6 crore, and miscellaneous expenses ₹132.3 crore, against total expenditure of ₹768.4 crore.
• Where the margin was meant to come from: private label. Kumar said in 2018 that in-house products were about 5% of revenue and the plan was 14% within five years, with a portfolio growing from about 20 products to 60–70 (India.com). Own-brand generics made through Alkem and Tulip Lab carried better margins than branded stock bought from distributors.
• Logistics as a purchased capability: the all-stock acquisition of Myra Medicines in May 2019 brought a Bengaluru operation doing about 4,000 orders a day, a five-minute pick-pack-dispatch cycle, 25 days of inventory and delivery cost under ₹40 an order (Forbes India and Inc42, May 2019). Prashant Singh said the point was “operational profitability”.

The part people get wrong is the word “run rate”. A ₹1,000 crore run rate in an inventory-led pharmacy is a statement about gross order value at MRP in a good month, annualised. Filed revenue is net of discounts, returns and the months that were not good. The distance between Medlife’s ₹1,000 crore claim in March 2019 and its ₹363.4 crore audited FY19 revenue is the distance between those two definitions, and it was never closed.

The numbers

Medlife filed audited accounts for FY18 and FY19. For FY20 the only public figures are the unaudited numbers the company reported in its August 2020 filings, as summarised by Entrackr; no audited FY20 or FY21 standalone accounts were made public before the merger.

• FY19 operating revenue grew 2.7 times on FY18, but the loss grew 1.45 times, and expenses nearly doubled from ₹302 crore to ₹768.4 crore (Entrackr and Inc42, January 2020).
• FY20 direct costs of ₹1,077.7 crore against ₹1,142.4 crore of revenue leave a gross margin of about 5.7% before any marketing, salaries or rent (Entrackr, August 2020).
• Unaudited FY20 EBITDA margin: minus 42%, an improvement on FY19 on a relative basis but a larger absolute loss (Entrackr, August 2020).
• Net cash outflow from operations: ₹185.3 crore in FY18, ₹425.1 crore in FY19 (Entrackr, January 2020).
• Balance sheet at end-FY20 (unaudited): total assets ₹316 crore, outside liabilities ₹473.6 crore, net worth minus ₹157.7 crore (Entrackr, August 2020).

Where the money came from

Medlife published no segment accounts beyond what its filings show, but the shape is visible.

• By line of business, FY19: medicines ₹318.5 crore (88%), labs and consultation ₹44.84 crore (12%). In November 2018 the company said pharmacy was about 80% of revenue and expected it to fall to 65–70% as diagnostics grew to a targeted ₹500 crore by FY20 (India.com). The audited FY19 split shows the opposite drift: medicines became a larger share, not smaller.
• By geography: 29 states and more than 25,000 pin codes by early 2020 (Inc42, December 2019), and 465-plus cities at the time of the merger (The Week, May 2021). The company’s earlier claim of “4,000 cities” (Business Today, August 2019) was a serviceability figure, not a revenue one.
• By channel: the app and website carried the bulk; the company also had more than 100 franchise stores by September 2019 (Entrackr) against a November 2018 plan for 150 stores within a year.
• By product type: private label was about 5% of revenue in late 2018, company-stated; no later figure was published.

The surprise is diagnostics. Medlife bought MedLabz in early 2019 and said the labs segment was already a ₹100 crore business with more than 80,000 samples processed (Inc42, April 2019). It was the one line where an online player could own the lab and keep the margin. Yet it stayed at roughly an eighth of revenue, and it was PharmEasy, not Medlife, that later paid ₹4,440–4,546 crore for a majority of Thyrocare in June 2021 (Inc42 and Wikipedia give the two figures) to get that margin at scale.

The risks

These are the risks that actually bit, with the mechanism in each case.

• Regulatory limbo. The Delhi High Court’s December 2018 interim ban was never converted into a settled framework; the draft e-pharmacy rules of August 2018 were not notified, and the All India Organisation of Chemists and Druggists, which says it represents more than 850,000 chemists, opposed both the sector and the Medlife–PharmEasy merger (Entrackr, September 2020). An inventory-led model needs a drug licence for every stocking point, so every unlicensed grey area was Medlife’s exposure, not a marketplace partner’s.
• Single-source capital. By August 2020, Medlife’s equity, preference shares and a ₹400 crore loan line all traced to one family trust, at 10.5% interest on the debt. When that trust’s appetite met a negative net worth of ₹157.7 crore and current liabilities exceeding current assets, the only remaining move was a sale. Entrackr’s September 2020 report notes the company had raised several debt rounds from the trust and promoters but “struggled attracting new investors”.
• Cost of growth in a low-margin category. With direct costs at roughly 94% of revenue in FY20 and ₹128 crore of advertising in FY19 alone, every incremental order deepened the loss until private label or diagnostics could change the mix. Neither did in time. Reliance’s August 2020 purchase of Netmeds and Amazon’s pharmacy entry meant the discount war would be funded by balance sheets far larger than a family trust.
• Operational fragility. The March 2020 lockdown showed that owning inventory did not mean owning fulfilment: deliveries fell 60% while orders rose several-fold because first-mile supply and last-mile staff both failed at once (The News Minute, March 2020).

The takeaway

The transferable lesson from Medlife is that patient capital is not the same as priced capital. The founders had access to money most startups can only dream of: a family trust that could write ₹400 crore cheques after selling Alkem shares. That let Medlife skip the discipline of a Series A, a Series B and the outside board members who come with them. It also meant that when the company needed a market price for its equity, in 2019 and again in 2020, nobody outside the family had ever set one. Lenders would lend; investors would not buy. The final price was set by the one buyer left in the room, and it was paid in the buyer’s own stock.

The postscript sharpens the point. API Holdings went on to raise at a $5.6 billion valuation, file for a ₹6,250 crore IPO in November 2021, withdraw it in August 2022, and reset its value to about $456 million in a 2023–24 rights issue (Inc42, 2025). Its FY25 revenue was ₹5,872 crore with a net loss of ₹1,517–1,572 crore depending on the line used (Inc42 and Entrackr, 2025). The stake Medlife’s shareholders took at a claimed $1.2 billion combined value has been through both ends of that arc. Selling for stock is a bet on the buyer, and Medlife’s founders made that bet at the top.

Frequently asked questions

Who founded Medlife and when?

Medlife International Private Limited was founded in Bengaluru in November 2014 by Tushar Kumar, from the family behind Alkem Laboratories, and Prashant Singh. Former Myntra CEO Ananth Narayanan joined as co-founder and CEO in August 2019, as per Business Today.

How much revenue did Medlife make?

Audited operating revenue was ₹135.7 crore in FY18 and ₹363.4 crore in FY19, with net losses of ₹164.2 crore and ₹403.6 crore respectively, as per RoC filings reported by Entrackr. For FY20 the company reported unaudited total revenue of ₹1,142.4 crore and a loss of ₹533.1 crore.

Why did Medlife merge with PharmEasy?

By mid-2020 Medlife had a negative net worth on an unaudited basis, had failed to close outside equity rounds in 2019 and 2020, and faced Reliance-backed Netmeds and Amazon. API Holdings agreed to acquire 100% of Medlife in exchange for up to 19.59% of its own equity, approved by the CCI in September 2020 and completed in 2021.

What did Medlife’s shareholders receive?

Up to 19.59% of API Holdings on a fully diluted basis, as per the CCI approval. Reports valued the stake at $235–250 million on a combined valuation of about $1.2 billion (Entrackr and Inc42). No cash consideration was disclosed.

What happened to Medlife customers and the app?

Medlife discontinued operations on 25 May 2021. Customers could log in to PharmEasy with their Medlife phone number; the past year’s digitised prescriptions and saved addresses were migrated, wallet balances had to be transferred to a bank account manually, and Medcash expired on 23 May 2021, as per The Week and PharmEasy’s own notice.

Sources

Figures are as of September 2026. Currency converted at $1 ≈ ₹96.0 as of 18 September 2026 (Trading Economics).

• Entrackr, “Medlife burns Rs 768 Cr to earn operating revenue of Rs 363 Cr in FY19”, January 2020
• Entrackr, “Amidst merger and funding talks, challenges lie ahead for Medlife”, August 2020
• Entrackr, “CCI approves merger of Medlife with PharmEasy”, September 2020
• Entrackr, “Medlife raising Rs 400 Cr convertible debt from Prasid Uno Family Trust”, September 2019
• Entrackr, “PharmEasy reports Rs 5,872 Cr revenue in FY25; burn remains flat”, 2025
• Inc42, “[What The Financials] Medlife In The Red For FY19 As Ad Spending Cancels Out Growth”, January 2020
• Inc42, “All You Need To Know About MedLife’s Merger With PharmEasy”, May 2021
• Inc42, “Exclusive: Epharma Startup Medlife Gets $17 Mn Top Up”, April 2019
• Inc42, “Exclusive: Online Pharmacy Medlife Raises INR 173 Cr”, July 2020
• Inc42, “Medlife Raises $15.5 Mn From Wilson Global Opportunities Fund For Growth”, December 2019
• Inc42, “Exclusive: Medlife Explores INR 155 Cr Funding From Hero Fincorp”, May 2020
• Inc42, “With 8000+ Deliveries Per Day, How Online Pharmacy Medlife Is Changing Healthcare Across 40 Cities In India”, April 2018
• Inc42, “Medlife Acquires Myra Medicines To Strengthen Epharma Biz”, May 2019
• Inc42, “PharmEasy’s Uneasy State”, 2025
• Inc42, “PharmEasy FY25 Loss Declines 40% To INR 1,517 Cr”, 2025
• Competition Commission of India via Press Information Bureau and Affairscloud, “CCI approves acquisition of 100% equity shares of Medlife by API Holdings and of up to 19.59% equity share capital of API Holdings by Medlife’s shareholders”, September 2020
• Business Today, “Ex Myntra chief executive Ananth Narayanan joins Medlife”, August 2019
• India.com / PTI, “Medlife eyes Rs 3,000 cr revenue in FY20; to invest Rs 700 cr”, November 2018
• Forbes India, “Medlife acquires Myra Medicines for express delivery and data science capabilities”, May 2019
• The News Minute, report on e-pharmacies’ supply and delivery problems during the national lockdown, 26 March 2020
• S.S. Rana & Co, “India: Delhi High Court imposes ban on online sales of medicines”, December 2018
• The Week, “Pharmeasy acquires Medlife to form India’s largest online pharmacy”, May 2021
• BioSpectrum India, “PharmEasy completes acquisition of Medlife”, May 2021
• PharmEasy blog, “Medlife Is Now PharmEasy – Better Together”, May 2021
• API Holdings, “Our Story” corporate timeline, accessed September 2026
• Wikipedia, “PharmEasy” (Thyrocare acquisition, IPO filing and withdrawal), accessed September 2026
• Trading Economics, USD/INR, 18 September 2026

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