Amazon Acquires PillPack

Updated: Jul 15, 2018

NY Times Coverage

Bloomberg Coverage

Quick thoughts.

We're big fans of PillPack.

EBITDA? Back of the envelope based solely on media reports is 2017 EBITDA is a loss of more than $60m.

  • Revenue - $100m

  • Gross Profit at 20% margin on pills is $20m

  • Payroll based on reports of 1,000 employees is $80 million.

  • Therefore, EBITDA as GP - SGA must be at least a $60 million loss.

PillPack is well-known commodity business. So what did they do right?

  • Design premium

  • Proprietary tech stack premium

  • Tweaked the traditional business model - but remained with the industry framework

  • Develop licenses in 50 states

Therefore, pure strategic sale. Yeah!

  • Reported total investment of $118m. Founded in 2013.

  • $1b exit.

  • You can calculate the rate of return.

  • Go Amazon!

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