Africa’s $45 billion pharmaceutical market is expected to grow at a 10% CAGR to $100 billion by 2030. However, the sector struggles with highly fragmented and under-capitalized supply chains that are flooded with counterfeit drugs that kill thousands of patients each year. 20-40% of drugs in Nigeria are fake.
A handful of health technology companies bring efficiency to Nigeria’s pharmaceutical supply chain issues. Life Storage Healthcare is one. In the year In 2020, it raised a $1 million seed round, followed by a newly announced $3 million pre-Series A fund; The last and over-subscribed round is directed Health54with Arua Capital Management As supportive leadership and participation from other existing investors.
Pharmacies in Nigeria play a vital role in how people get medicine in the country. Although some pharmacies have encouraged self-diagnosis among patients, they remain one of the cheapest options for accessing health care. However, due to resource allocation and underdevelopment in healthcare, pharmacies are unable to perform to their full potential. These inadequacies lead to the widespread circulation of counterfeit drugs as their quality becomes expensive and difficult to obtain.
After taking on pharmaceutical and delivery-related projects in their previous careers, co-founders Brian Mezu and Andrew Garza knew that whatever they were building had to democratize access to quality and affordable primary healthcare. They launched Lifestores Healthcare in 2017 as a chain of retail pharmacies before branching out into B2B services for pharmacies and patients.
Life Storage has two B2B products. The first is a B2B marketplace called OGApharmacy. In the year Launched in 2020 during the pandemic, it allows pharmacies and hospitals to aggregate their purchasing needs, allowing Lifestores to negotiate lower prices with suppliers for high-quality drugs and get discounts of 10 to 20 percent. Another option that pharmacies and suppliers use to run their business is an ERP system.
Image Credits: Life stores health care
Lifestores Healthcare provides its services through a network of over 750 outlets. Health technology clothing It is experiencing 25% monthly marketplace growth and counts over 10% of Nigerian pharmacies as registered customers. It plans to expand its market share to 25%, increasing the number of patients reached by 4x from 100,000 to 400,000 by 2023.
“The number of patients who have loyalty accounts with us is growing by double digits every month. Next, we think a lot about the impact we have through the pharmacies that we support with our software, says CEO Mezu. “And then we indirectly touch over 200,000 patients from our software and the services we provide to those pharmacies. These are the ways we’re thinking about patient impact starting today. We’re also on the cusp of launching a number of B2C initiatives and some great features that are more direct to the patient.”
To drive this growth, Lifestores will open a new Lagos processing center and launch new technology features as part of its B2B offerings, including pharmacy management software, AI-driven predictive ordering, advanced credit offerings and patient management initiatives, it said in a statement. . Life Store expands its B2C services, with pilots in patient savings, care management and drug delivery.
While telemedicine has been a unique healthcare offering that has seen the highest adoption globally since the pandemic, startups that have digitized the supply chain and distributed it to suppliers like Lifestores have sprung up. It is the most impressive growth in the African healthcare space in the last 12 months, according to the report. Other companies in this space include Mutti by mPharma, HealthPlus, Shelf Life by Field Intelligence, and Maisha Meds to assist with products from community pharmacies and low-end suppliers such as drugstores.
“In many cases, players are operating across multiple geographies and perhaps multiple segments. But we’ve taken a slightly different direction in going deeper,” said the CEO, explaining how they differ in expanding life storage operations. it is.”
The founders shared some of the lessons they’ve learned over the past five years running the startup: the importance of building partnerships across the board, including pharmacies, pharmacies, hospitals and regulators; Pharmacists are embracing technology more than people think; and how health care providers are concerned about transparency in drug quality and cost.
“Also, we have seen how healthcare wholesalers act as banks and provide loans to pharmacies and hospitals, which allows these healthcare providers to do their business with loans much cheaper than what they get from banks,” Garza said in some of the company’s lessons. “That’s been a reality in the healthcare space for a long time. We’re starting to see the big benefits of that in terms of flexibility when we’re working on advanced features like AI-driven predictive sequencing. We have in-house technologies for ERP and marketplace, so it’s a lot easier to do those kinds of things, for which new We can sort out the advanced stuff.
Life Storage Seed Round Health54 makes its first investment in the continent. The recently launched firm is the healthcare-based corporate venture capital (CVC) vehicle of CFAO Group (part of Toyota Tsusho). It has the largest healthcare distribution center in sub-Saharan Africa.
“We are proud and excited to make our first investment in Nigeria with Health54. We were impressed with Brian and Andrew’s on-the-ground experience of running several retail pharmacies in Nigeria,” said Kome Verken, Health54 Managing Director on the investment. “Over two years, we have built a primary distribution platform with OGApharmacy. As a strategic partner, we are excited to work together to support more patients in Nigeria and beyond with quality primary healthcare and bring the benefits of a vertically integrated pharmaceutical supply chain.”
This investment complements Lifestores’ growing network of health care providers and CFAO Healthcare’s wholesale distribution capabilities in Nigeria and across Africa, in line with its regional expansion plans. But now HealthTech wants to fuel growth in Nigeria, improve its software capabilities, reach new customer segments, and increase sales and engineering teams and senior management hiring.
