Lifestores Healthcare, a Lagos-based three-year old health-tech startup, disrupting primary healthcare delivery in Nigeria by improving efficiencies in supply chain for thousands of local pharmacies and small-scale chemist shops has raised $1 million seed round led by Lagos-based VC Consonance Kuramo. 

“Our thesis is that the massive opportunity for transformation in healthcare delivery in Nigeria is finding a way to support pharmacies to professionalize the whole industry,” says Bryan Mezue, Lifestores’ chief executive.

Here Is The Deal 

• Leading this $1 million seed round is the Lagos-based investment firm Consonance Kuramo. Other participating doctors include Flying Doctors Nigeria Group, Greentree Syndicate, Altadore Lionbear Capital, Unseen Ventures, StartUp Health Transformer Fund, K50 Ventures, Chinook Capital, Kepple Africa Ventures. This round also saw participation from unnamed angel investors with a background in healthcare.
• With this round of financing, Lifestores seeks to further grow its business model to disrupt inefficiencies in the Nigerian health sector’s supply chain by improving inventory management and purchasing. 
• With its access to drug manufacturers, Lifestores offers business owners an avenue to purchase stock more easily and at cheaper rates by allowing small stores pool their orders.

“We want to make sure people are buying from the best source which translates into better costs and better quality,” says Andrew Garza, the chief operating officer.

• Some of the startup’s previous investments includes funding from the angel investor Kairos Angels which committed some undisclosed amount of funding in the startup in 2018.

Why The Investors Invested

Lifestores’ investors would likely have been swayed by the early success of a Ghana-based startup that’s focused on reinventing medicine procurement processes for pharmacies. Since being founded in 2013, Ghana’s mPharma has raised over $20 million and built operations in five African countries. In a landmark deal last year, mPharma acquired Kenya’s second-largest pharmacy chain. There’s also marked investor interest in the pharmacy space in Nigeria: in March 2018, Alta Semper Capital backed HealthPlus, a Nigerian pharmacy, with $18 million to expand its retail footprint across West Africa.

The healthcare and retail markets in Nigeria are characterized by a number of advantageous trends including growing effective demand for pharmaceutical products from an increasingly urbanized population, underpinned by favorable demographics, increased consumer awareness and evolving consumption patterns. However, Nigeria remains one of the least penetrated formal retail markets in the world.

On an aggregate basis, it is estimated that 10,000 new (representing 4x growth) Nigerian pharmacies are required to match SA or Ghana penetration levels (World Economic Outlook, various national sources).

Lifestores’ intervention in this regard possibly helped to convince investors to commit the funds. 

A Look At What Lifestores Does

Co-founded in 2017 by Bryan Mezue, Ken Ahaotu and Andrew Garza, Lifestores intends to disrupt the retail pharmacy sector through:

1. The roll out of low-cost pharmacies targeted at the mass-market;
2.  The reduction of fake drug purchase and usage;
3. The provision of technology-enabled access to medical professionals, health information and drugs; and
4. The development of new models of ownership that will further drive entrepreneurship and jobs in the sector.

The startup spent its first years of existence running a network of pharmacies to better understand the industry’s major pain points. 

‘‘We then used that experience and learning to create a support service for other pharmacies,” says Bryan Mezue, Lifestores’ chief executive.

With its software offerings tested within its network, Lifestores is now pursuing an aggressive partnership model with thousands of pharmacies and chemists across the country, starting in Lagos, Nigeria’s economic nerve center.

For its part, Lifestores Healthcare is also looking to develop a chain of pharmacies mainly through acquisitions. But partnering with thousands of smaller pharmacies and chemists represents a central part of the current business strategy in Nigeria’s “super-fragmented market,” Mezue says.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer.
He could be contacted at udohrapulu@gmail.com