In the dynamic world of venture capital, Prosus India, part of the global investment giant Prosus, has been actively shaping the landscape of India’s startup ecosystem with its multi-billion-dollar investments. However, the latest half-yearly (H1FY25) performance update reveals mixed results for the company’s portfolio, particularly highlighting the underperformance of online pharmacy startup PharmEasy and edtech player Eruditus.
PharmEasy’s Continued Struggles
One of the most notable takeaways from Prosus' latest disclosures is PharmEasy’s persistent struggles in terms of return on investment. The online pharmacy startup has continued to be a significant drag on Prosus India’s portfolio, delivering a negative internal rate of return (IRR) of -38%. This marks an improvement from the same period last year, when PharmEasy reported an even steeper negative IRR of -44%. Despite this slight recovery, the company’s performance has remained a challenge for Prosus, especially as investors look for returns on their sizable investments.
For a company that once promised to revolutionize India’s online healthcare market, these figures signal the difficulties PharmEasy has faced in scaling its business, combating competition, and achieving profitability. As Prosus continues to evaluate its portfolio, PharmEasy’s performance remains a critical point of attention, especially with its position as a leading player in the rapidly growing but still evolving sector of online pharmacies.
Eruditus and the Edtech Landscape
Eruditus, the edtech company in Prosus' portfolio, has faced challenges, posting an IRR of 14%, down from 22% last year. The slowdown in online education post-pandemic, regulatory issues, and increased competition have contributed to its underperformance. However, the company still shows potential as the global education sector evolves, remaining an important player in Prosus’ portfolio.
Positive Trends in Other Investments
In contrast, Prosus is seeing better returns from other investments in India. ElasticRun, Swiggy, PayU, and Meesho have all posted higher IRRs, reflecting strong growth in sectors like logistics, food delivery, fintech, and social commerce. These companies are capitalizing on emerging trends in India’s dynamic market.
IPO Pipeline: The Road Ahead
Prosus is optimistic about India’s startup ecosystem, with companies like Meesho, BlueStone, PayU, and Urban Company expected to go public within the next 12-18 months. These IPOs could unlock significant value for Prosus, with Swiggy's upcoming listing marking just the beginning of a promising wave of public offerings.
The Future of Investment in India
Despite challenges, Prosus remains committed to India, with over $8 billion invested so far. The company is focusing on increasing capital deployment to foster growth and value creation across its portfolio. CEO Fabricio Bloisi emphasized that while large investments may be slower, the long-term potential of India remains strong.
Conclusion
While PharmEasy and Eruditus have underperformed, Prosus' broader portfolio in India is showing strong growth, with upcoming IPOs likely to bring significant returns. Prosus is well-positioned to capitalize on India’s continued growth, navigating both challenges and opportunities in the market.
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