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Lifestores Healthcare raises $3M to expand its pharmaceutical market across Nigeria • londonbusinessblog.com

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The $45 billion pharmaceutical market in Africa is expected to grow 10% CAGR to $100 billion by 2030. Yet the industry struggles with highly fragmented and under-capitalized supply chains full of fake drugs, which cause the death of thousands of patients every year; in Nigeria 20-40% of drugs are counterfeit.

A handful of health tech companies are bringing efficiencies to Nigeria’s pharmaceutical supply chain; Lifestores Healthcare is a. In 2020 it’s raised a $1 million seed round, followed by the newly announced $3 million pre-Series A financing; the last and oversubscribed round was led by Health54of Aruwa Capital Management as a supportive lead and participation of other existing investors.

Pharmacies in Nigeria play a vital role in how people access medicines in the country. While pharmacies sometimes help facilitate patient self-diagnosis, they remain the cheapest options for getting healthcare. However, given the fragmentation and underdevelopment of healthcare resources, pharmacies cannot perform optimally. These shortcomings lead to the high prevalence of counterfeit drugs, as quality drugs also become expensive and difficult to obtain.

After taking on pharmaceutical-related and supply chain projects in their previous jobs, co-founders Bryan Mezue and Andrew Garza knew that whatever they were building should democratize access to quality and affordable primary health care. They launched Lifestores Healthcare in 2017 as a retail pharmacy chain that uses technology to provide a variety of services. There are two B2B components for Lifestores. The first is called the B2B marketplace OGApharmacy. Launched during the 2020 pandemic, it lets pharmacies and hospitals aggregate their purchasing needs, allowing Lifestores to negotiate with suppliers for the lowest possible price for high-quality drugs, giving them a 10 to 20% discount. The other is an ERP system that pharmacies and pharmacies can use to run their operations.

Image Credits: Lifestores Healthcare

Lifestores Healthcare provides its services through a network of more than 750 points of sale. The healthtech outfit said it is experiencing 25% monthly market growth and counts more than 10% of pharmacies in Nigeria 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 a loyalty account with us is growing by double digits every month. And then we also think a lot about the magnitude of the impact we have through the pharmacies that we don’t own, but support through our software,” said CEO Mezue. “And then we indirectly touch more than 200,000 patients through our software and the services we offer those pharmacies. As of today, those are the ways we think about our impact on the patient. We are also about to launch several B2C initiatives and some cool features that are more direct to the patient.”

To drive this growth, Lifestores will open a new processing center in Lagos and launch new technology features as part of its B2B offering, including pharmacy management software, AI-powered predictive orders, advanced credit offerings and patient management initiatives, it said in a statement. . . Lifestores will also expand its B2C services with pilots in patient savings, care management and drug delivery.

While telemedicine remains the standout healthcare offering that has been massively adopted globally since the pandemic, startups that are digitizing the supply chain and distribution to providers like Lifestores have achieved and seen faster scaling. according to this the most impressive growth in healthcare in Africa in the last 12 months report. Other companies in this space that partner with community pharmacies and lower-cost providers such as drug stores to stock products include Mutti from mPharma, HealthPlus, Shelf Life from Field Intelligence, and Maisha Meds.

“In many cases, players are working on multiple regions and possibly multiple segments. But we’ve taken a slightly different angle, where we’re going quite deep,” said the CEO, describing how Lifestores differs in expanding operations. “Because the market is fragmented , we saturate certain regions before moving to others.”

The founders also shared some lessons learned from the past five years of running their startup: the importance of building partnerships across the board, including pharmacies, pharmacies, hospitals and regulators; the fact that pharmacists use technology more than people think; and how healthcare providers are concerned about transparency about the quality and price of medicines.

“We’ve also seen healthcare wholesalers act like banks and pharmacies and hospitals give medicines on credit, effectively allowing these healthcare providers to do their jobs on credit for much cheaper than what they would get from the banks,” Garza added. of the company’s teachings. “This reality has been around for a long time in healthcare. We’re starting to see the huge benefit of that in terms of flexibility as we work on more advanced features like AI-driven predictive sequencing. It’s become much easier to do that kind of thing, because we have all the technology for the ERP and marketplace in-house, on which we can put new advanced things on top.”

The Lifestores seed round marks Health54’s first investment on the continent. The recently launched company is the dedicated to healthcare corporate venture capital (CVC) vehicle of CFAO Group (part of Toyota Tsusho), with the largest healthcare distribution channel in sub-Saharan Africa.

“We are proud and happy to make our first investment with Health54 in Nigeria and in Lifestores. We were impressed with Bryan and Andrew’s hands-on experience running multiple pharmacies in Nigeria,” said Côme Vercken, Managing Director, Health54, of the investment. “In two years they have built a first-class distribution platform with OGApharmacy. As a strategic partner, we are excited to collaborate and leverage the benefits of our vertically integrated pharmaceutical supply chain to support more patients in Nigeria and beyond with quality primary health care.”

Through this investment, Lifestores will benefit from Health54’s growing network of health service providers and from CFAO Healthcare’s existing wholesale distribution capabilities in Nigeria and across Africa, should it plan regional expansions in the future. But for now, the healthtech wants to drive growth in Nigeria, improve its software capabilities, reach new customer segments and hire more staff in sales and engineering teams and senior management.

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