Nigerian drug distribution startup, DrugStoc has announced the raise of a $4.4m Series A funding to expand across Nigeria.
The Series A round was led by Africa HealthCare Master Fund (AAIC) with participation from Vested World, a repeat investor, and the German Development Bank (DEG). Other private individuals also contributed to the round.
In 2019, DrugStoc received $65,000 from the inaugural $1million Africa Netpreneur Prize Initiative by the Jack Ma Foundation. The startup is also a grant recipient of the Bill and Melinda Gates Foundation.
Launched in 2017, DrugStoc was founded by Chibuzor Opara and Adham Yehia, DrugStoc is a procurement platform to source all the medications, consumables, and small medical devices needed for medical practices.
DrugStoc was borne out of IntegraHealth, a hospital management company founded by Opara and Yehia. The founders said they saw the gaps in the pharmaceutical industry’s supply chain in Nigeria and decided to fill them.
The duo then proceeded to launch a tech-based platform to connect pharmaceutical manufacturers with distributors. In 2017, after a year-long incubation at Stanford’s Institute for Innovation in Developing Economies, they officially launched DrugStoc.
Instead of simply connecting manufacturers with distributors, the startup buys directly from the manufacturers and now distributes to hospitals and pharmacies. They also have a channel that helps pharmacies scale their businesses with collateral-free loans.
DrugStoc currently links 400 manufacturers to 3,200 doctors, hospitals and pharmacies. The startup earns a commission for every sale it makes and has made over 9 million prescriptions of its products dispensed.
According to the CEO, the platform’s monthly revenues have grown over 1,500% in the last three years. This, he says, can be attributed to the anti-counterfeit assurance that comes with their products.
DrugStoc plans to deliver quality pharmaceutical products to 100 million people within Nigeria with the new investment, an exponential increase from the 14 million people they currently serve.
The plan includes expansion into 16 Nigerian states outside Lagos, more fulfillment centers, and expanded transit points and routes. It also wants to provide better logistic options for last-mile deliveries.
DrugStoc says it is building partnerships with financial institutions to increase access to sustainable supply chain financing. This is in addition to plans of more investments in cold chain infrastructure to enhance the safe distribution of perishable products.
“We are very excited to be part of the DrugStoc journey. The pharmaceutical market in Africa has enormous growth potential, and we are glad to back a company that is well-positioned to be a key player in the sector’s growth in Sub-Saharan Africa,” Nobuhiko Ichimiya, a director at the Africa HealthCare Master Fund (AAIC) said.
DrugStoc’s co-founder and CEO, Chibuzor Opara, while expressing the company’s commitment to making an impact in the healthcare industry, said the funding will enable the startup to expand and launch its tech-enabled products in more African countries where pharmaceuticals are critically needed. DrugStoc also plans to expand its operations beyond Nigeria.
“In Nigeria, we intend to expand beyond 14 million we currently serve to cover just around 100 million people. And this would be achieved by expanding to about 16 states. Once we are done with the heavy lifting from that expansion, we will be training our sights on other countries.”
With Africa’s pharmaceutical industry set to be worth $70 billion by 2030, the health tech startup will now double down on its vision to change the way healthcare providers interface with the pharmaceutical market and revolutionize sub-Saharan Africa’s access to quality pharmaceuticals.