Africa’s $45 billion prescription drugs market is expected to develop 10% CAGR to $100 billion by 2030. But, the sector struggles with extremely fragmented and undercapitalized provide chains rife with faux drugs, which trigger the dying of hundreds of sufferers yearly; in Nigeria, 20-40% of medication are counterfeit.
A handful of healthtech corporations deliver effectivity to Nigeria’s pharmaceutical provide chain points; Lifestores Healthcare is one. In 2020, it raised a $1 million seed round, adopted by its newly introduced $3 million pre-Sequence A funding; the latter and oversubscribed spherical was led by Health54, with Aruwa Capital Administration as a supporting lead and participation from different present traders.
Pharmacies in Nigeria play a necessary function in how folks entry treatment within the nation. Though some pharmacies allow self-diagnosis dealings amongst sufferers, they continue to be one of many most cost-effective choices for getting healthcare. Nonetheless, given the fragmentation and underdevelopment of sources in healthcare, pharmacies can not carry out to their optimum capabilities. These inadequacies result in the excessive prevalence of pretend drugs as high quality ones additionally turn into costly and tough to acquire.
After taking up pharmaceutical-related and supply-chain initiatives of their earlier jobs, co-founders Bryan Mezue and Andrew Garza knew that no matter they had been constructing ought to democratize entry to high quality and inexpensive main healthcare. They launched Lifestores Healthcare in 2017 as a sequence of retail pharmacies earlier than pivoting to B2B companies for pharmacies and digital companies for sufferers.
Lifestores has two B2B merchandise. The primary is the B2B market referred to as OGApharmacy. Launched through the pandemic in 2020, it lets pharmacies and hospitals combination their buying wants, with which Lifestores negotiates with suppliers for the bottom doable value on high-quality drugs, thereby getting 10 to twenty% reductions for them. The opposite is an ERP system that pharmacies and dispensaries can use to run their operations.
Picture Credit: Lifestores Healthcare
Lifestores Healthcare supplies its companies by a community of greater than 750 retailers. The healthtech outfit stated it’s experiencing a 25% month-to-month market development and counts greater than 10% of Nigeria’s pharmacies as registered prospects; it plans to broaden its market share to 25%, which can improve the variety of sufferers reached by 4x, from 100,000 to 400,000 by 2023.
“The variety of sufferers who’ve loyalty accounts with us is rising by double digits each month. After which we additionally suppose so much concerning the scale of impression now we have by the pharmacies we don’t personal however assist by our software program,” CEO Mezue stated. “After which, we not directly contact over 200,000 sufferers from our software program and the companies we provide to these pharmacies. As of at the moment, these are the methods we take into consideration our affected person impression. We’re additionally on the verge of launching a number of B2C initiatives and a few cool options which might be extra direct to the affected person.”
To drive this development, Lifestores will open a brand new Lagos processing centre and launch new know-how options as a part of its B2B choices, together with pharmacy administration software program, AI-driven predictive ordering, superior credit score choices and affected person administration initiatives, it stated in a press release. Lifestores may even broaden its B2C companies, with pilots in affected person financial savings, care administration and medicine supply.
Whereas telemedicine stays the standout healthcare providing that has witnessed huge adoption globally because the pandemic, startups that digitize the availability chain and distribution to suppliers like Lifestores have achieved scale quicker and seen probably the most spectacular development amongst Africa’s healthcare house within the final 12 months, in keeping with this report. Different corporations on this house which work with group pharmacies and lower-end suppliers comparable to drug outlets to assist inventory merchandise embody Mutti by mPharma, HealthPlus, Shelf Life by Field Intelligence and Maisha Meds.
“In lots of circumstances, gamers are engaged on a number of geographies, and presumably a number of segments. However we’ve taken a little bit of a special angle, the place we’re going fairly deep,” stated the CEO, describing how Lifestores differs in increasing operations. “As a result of the market is fragmented, we’re saturating sure areas earlier than we transfer to different ones.”
The founders additionally shared some learnings acquired previously 5 years of working their startup: the significance of constructing partnerships throughout the board, together with pharmacies, dispensaries, hospitals and regulators; the truth that pharmacists are adopting know-how greater than folks suppose; and the way healthcare suppliers are involved about transparency on high quality and value of medicines.
“We’ve additionally seen how healthcare wholesalers function banks and provides pharmacies and hospitals drugs on credit score, which lets these healthcare suppliers do their work upon credit score successfully less expensive than what they’d safe from the banks,” added Garza on a number of the firm’s learnings. “This actuality has existed for a very long time within the healthcare house. We’ve began seeing the large advantage of that by way of flexibility as we work on extra superior options like AI-driven predictive ordering. It’s turn into a lot simpler to do stuff like that since now we have all of the know-how for the ERP and market in-house, for which we are able to layer new superior issues on high.”
Lifestores’ seed spherical marks Health54’s first funding on the continent. The just lately launched agency is the healthcare-dedicated company enterprise capital (CVC) car of CFAO Group (a part of Toyota Tsusho), which has the biggest healthcare distribution channel in sub-Saharan Africa.
“We’re proud and completely happy to make our first funding with Health54 in Nigeria and in Lifestores. We had been impressed with Bryan and Andrew’s on-the-ground expertise of getting run a number of retail pharmacies in Nigeria,” stated Côme Vercken, managing director of Health54, on the funding. “In two years, they’ve constructed a first-rate distribution platform with OGApharmacy. As a strategic associate, we’re delighted to work collectively and produce the advantages of our vertically built-in pharmaceutical provide chain so we are able to assist extra sufferers in Nigeria and past with high quality main healthcare.”
This funding will see Lifestores leverage Health54’s rising community of well being companies suppliers and CFAO Healthcare’s present wholesale distribution capabilities in Nigeria and throughout Africa ought to it plan regional growth down the road. However for now, the healthtech needs to gas development in Nigeria, enhance its software program capabilities, attain new buyer segments and ramp up hiring throughout gross sales and engineering groups and senior administration.
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