Nigerian e-health pharmaceutical distribution startup DrugStoc secures $4.4 million Series A funding, embarks on expansion drive

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Drug supply chains across Africa have been fragmented for decades causing sourcing and distribution challenges as well as quality concerns; fake and as substandard product Market floods. Nevertheless, these issues facing the supply chain can be fixed.

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Chibuzo Opara and Adham Yehiya, being all too familiar with the problems of a poor drug supply chain, plan to broaden the reach of DrugStock, an e-health drug procurement platform that connects pharmaceutical companies to institutions such as hospitals and pharmacies. Eliminates challenges. , in Nigeria.

drugstock It is currently on an aggressive expansion plan to distribute quality pharmaceutical products to 100 million people within Nigeria, having just closed a $4.4 million Series A funding. The startup plans to expand to 16 states within Nigeria as it moves beyond Lagos, the economic hub of the West African country. This is in addition to its more grand plans to venture into other markets in Africa outside Nigeria.

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The availability of high-quality pharmaceutical products, even within Nigeria alone, has meant preventing thousands of preventable deaths – such as the loss of life associated with blood loss during childbirth, or the loss of children. Suffering from diarrheal diseases.

“In Nigeria, we intend to expand to over 14 million, we currently serve to cover approximately 100 million people. And this will be achieved by expanding to around 16 states. Once we do that expansion If we get on with the heavy lifting, we will train our places in other countries.”

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Drugstock’s funding round was led by the Africa Healthcare Master Fund (AAIC). Other investors include Chicago-based venture firm Wested World, the German Development Bank (DEG) and high-net-worth individuals with a keen interest in techno-health.

“We are very excited to be part of the drugstock journey. The pharmaceutical market in Africa has immense growth potential, and we are delighted to support a company that is a leader in the growth of the region in sub-Saharan Africa. The player is well positioned to be there,” said AAIC director, Nobuhiko Ichimiya.

Drugstock was founded in 2015 by Oprah and Yehia, but its history dates back to 2010 when the two founded Integra Health, a hospital management company based on Yehia’s master’s degree project. The two entrepreneurs first met as students at Maastricht University in Holland.

Oprah was completing her PhD while Yehia, who was pursuing a master’s in Health Innovation Management, was looking for a mentor for her project when they met. Oprah, who practiced as a doctor for nearly six years before switching careers in economics and finance, matched Yehia’s need for a consultant with experience in Nigeria’s healthcare sector.

Yehia, a geneticist who was part of the management team of his father’s hospital in Lagos, had direct experience with issues that were also facing hospitals in Nigeria. And, for his Masters project, he sought to explore possible solutions to some of the challenges he saw in the industry.

“It was an immediate bond. So when we first met, we actually spent about six hours together in our apartment, meditating on the problems with Nigeria’s healthcare system,” Yehia said.

“Then, very quickly, we both decided that we were going to start a company. We didn’t know what it was, but we were going to focus on trying to streamline Nigeria’s healthcare system in our lifetime. Were – we understood that the system was the problem.”

Chibuzo Opara and Adham Yehiya, co-founders of Drugstock, a technology-based drug procurement platform.

The two founded their first company, Integra Health, which was initially contracted to manage 20 hospitals, as gaps in Nigeria’s pharmaceutical supply chain became apparent.

In response, the co-founders created and operated a technology-based platform to connect manufacturers with distributors in 2015. The plan failed to take off as it immediately became clear that one platform alone would not suffice. After a year-long incubation at Stanford’s Institute for Innovation in Developing Economies, the strategy twice changed when DrugStock was officially launched in 2017 to include distribution.

“I think we came out of Stanford with a better understanding of business modeling and value chains,” Yehia said of the incubation program.

“We decided that we needed to get the distribution license, and need to do it in a pharmaceutical way. And to do it in a proper way, we needed to buy directly from manufacturers and build the value chain internally,” They said.

In retrospect, Yehia said that technological infrastructure alone would not solve the problems of fragmentation in drug delivery, as they now know the critical need for strategic infrastructure such as fulfillment centers – warehouses from where orders are processed, packaged and packaged. Are shipped – and customer support units.

Drugstock currently links 400 manufacturers to 3,200 doctors, hospitals and pharmacies. Oprah says the platform’s monthly revenue has increased by more than 1,500% over the past three years; A demand brought on by the quality assurance that comes with DrugStock’s platform. The startup earns a commission for every sale made.

“When we started, I don’t think we ever had any doubts about demand because we understood the scope of the problem. And we understood that people are fed up with the status quo,” Opara said.

“It is the fact that we are not only transforming convenience and access, but also paying great attention to quality, that bothers every healthcare professional at the end of the day, that is the underlying drive in a lot of healthcare facilities or pharmacies. “

In 2019, Drugstock won part ($65,000) of the inaugural $1 million Africa Netpreneur Prize initiative by the Jack Ma Foundation, a pitching competition that rewarded 10 enterprises providing solutions to critical issues across the continent. He is also the recipient of a grant from Bill and Melinda Gates, and seed funding from Westedworld; An early stage investment fund with a focus on the sub-Saharan market.

And now, with new funding, Drugstock is expanding its coverage to more areas through more fulfillment centers and expanded transit points and routes, providing better logistical options for last mile delivery. It is also building partnerships with financial institutions to increase access to sustainable supply chain financing. This is in addition to plans to invest more in cold chain infrastructure to enhance the safe distribution of perishable products.

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