Nigerian health-tech startup DrugStoc has raised $4.4 million in a recently concluded Series A funding round. The round was led by Africa HealthCare Master Fund (AAIC) and saw the participation of other investors such as the German Development Bank and Vested World, an already existing investor. Individual investors were also a part of the round.
DrugStoc was founded in 2017 by Chibuzor Opara and Adham Yehia. It is basically a procurement platform that can be used to source medications, consumables, and small medical devices. In 2019, the startup received $65,000 as a beneficiary of the inaugural $1 million Africa Netpreneur Prize Initiative by the Jack Ma Foundation. That’s not all. It was also a recipient of an undisclosed grant from the Bill and Melinda Gates and got its undisclosed seed fund from Vested World.
DrugStoc is a spin-off company of IntegraHealth co-founded by Chibuzor Opara and Adham Yehia. IntegraHealth is a hospital management company, and DrugStoc was founded following the desire to fill the supply chain challenges faced by Nigeria’s pharmaceutical sector.
Speaking on their investment in the company, Nobuhiko Ichimiya, the Director of Africa HealthCare Master Fund said that “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”.
According to DrugStoc’s co-founder Chibuzor Opara, the newly-acquired fund will be used to fuel the startup’s expansion plans, as well as launch its tech-enabled products in more African countries in critical need of products and services it offers.
DrugStoc operates by buying pharmaceutical products from their manufacturers and then distributing them to hospitals, instead of simply connecting manufacturers with distributors. Its platform also provides loan services for small pharmaceutical companies.
The company claims to currently link at least 400 manufacturers to 3,200 doctors, hospitals and pharmacies and earns a commission from every sale it makes. The startup has a track record of at least 9 million prescriptions of their products dispensed since it started in 2017, and according to the startup’s CEO, it’s had monthly revenue growth of more than 1,500 percent in the last three years.
With the funds, DrugStoc plans to meet the pharmaceutical needs of 100 million Nigerians. Currently, it meets the needs of 14 million Nigerians. “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”, Drugstoc’s CEO said.
Africa Health Holdings, another health-tech startup pushing for its telemedicine platform, recently announced a Series A round of $18 million.