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Nigerian Pharmaceutical Marketplace Lifestores Healthcare Raises $3M To Expand In Nigeria

October 13, 2022

Lifestores Healthcare, a startup that is improving the efficiency of Nigeria’s pharmaceutical supply chain, has announced that it has raised $3 million in a pre-Series A funding round that was oversubscribed. The round was led by Health54, and Aruwa Capital Management served as a supporting lead. Other existing investors also took part in the funding.

In 2020, it completed a seed round raising a million dollars.

With the help of this investment, Lifestores will be able to take advantage of Health54’s growing network of health services providers as well as CFAO Healthcare’s existing wholesale distribution capabilities in Nigeria and throughout Africa, in the event that the company decides to expand into other African regions in the future. But for the time being, the health technology company’s goals are to drive expansion in Nigeria, strengthen its software skills, expand into new client sectors, and step up hiring efforts across sales, engineering, and senior management teams.

Why The Investors Invested

“We’re proud and happy to make our first investment with Health54 in Nigeria and in Lifestores. We were impressed with Bryan and Andrew’s on-the-ground experience of having run multiple retail pharmacies in Nigeria,” said Côme Vercken, managing director, Health54, on the investment. “In two years, they have built a first-rate distribution platform with OGApharmacy. As a strategic partner, we’re delighted to work together and bring the benefits of our vertically integrated pharmaceutical supply chain so we can support more patients in Nigeria and beyond with quality primary healthcare.”

This is Health54’s first investment on the continent, and it was in the seed round for Lifestores. CFAO Group, which is a subsidiary of Toyota Tsusho, has the largest healthcare distribution channel in sub-Saharan Africa, and the recently established company is the corporate venture capital (CVC) vehicle of CFAO Group committed to the healthcare industry.

Lifestores Healthcare — *Credits: Lifestores*

A Look At What The Startup Does

Lifestores is a B2B company that was established in 2017 by Bryan Mezue and Andrew Garza, and it now offers two different products. The first one is a business-to-business marketplace known as OGApharmacy. Lifestores is able to negotiate with suppliers for the lowest possible price on high-quality medications by aggregating the purchasing needs of pharmacies and hospitals. As a result, the company is able to obtain discounts of 10 to 20 percent for its customers. The programme was introduced during the pandemic that occurred in 2020. The other option is an enterprise resource planning (ERP) system that medicinal cannabis dispensaries and pharmacies may use to manage their operations.

More than 750 locations make up the network that Lifestores Healthcare uses to deliver its services to customers. The health technology company stated that it is experiencing a 25% monthly growth in the marketplace and that it counts more than 10% of Nigeria’s pharmacies as registered customers. It plans to expand its market share to 25%, which will increase the number of patients reached by 4 times, going from 100,000 to 400,000 by the year 2023.

“The number of patients who have loyalty accounts with us is growing by double digits every month. And then we also think a lot about the scale of impact we have through the pharmacies we don’t own but support through our software,” CEO Mezue said. “And then, we indirectly touch over 200,000 patients from our software and the services we offer to those pharmacies. As of today, those are the ways we think about our patient impact. We’re also on the verge of launching several B2C initiatives and some cool features that are more direct to the patient.”

Lifestores will establish a new Lagos processing centre and provide new B2B technology capabilities, including pharmacy management software, AI-driven predictive ordering, improved credit options, and patient management efforts. Lifestores will extend B2C offerings, including patient savings, care management, and pharmaceutical delivery.

Telemedicine has experienced tremendous acceptance internationally since the epidemic, but firms that digitise the supply chain and delivery to providers like Lifestores have had the most amazing growth in Africa’s healthcare arena in the last 12 months. Mutti by mPharma, HealthPlus, Shelf Life by Field Intelligence, and Maisha Meds enable community pharmacies and pharmacy stores stock supplies.

“Players work on numerous geographies and segments. But we’re going deeper, “CEO describes how Lifestores expands differently. Because the market is divided, we saturate some regions first, he says.

The founders shared some of their startup’s five-year learnings, including the importance of building partnerships with pharmacies, dispensaries, hospitals, and regulators; the fact that pharmacists are adopting technology more than people think; and how healthcare providers are concerned about transparency on quality and price of medications.

“We’ve also observed how healthcare wholesalers operate as banks and supply pharmacies and hospitals drugs on credit,” said Garza. “This helps healthcare providers conduct their business on credit much cheaper than what they’d secure from banks.” “This has long been true in healthcare. As we work on sophisticated features like AI-driven predictive ordering, we’re seeing its flexibility benefits. Since we have the ERP and marketplace technologies in-house, we can add additional complex features.”

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Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert.
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard. You can book a session and speak with him using the link: https://insightsbyexperts.com/view_expert/charles-rapulu-udoh

Nigerian Health-tech Startup Lifestores Raises $1 mn To Scale Business

February 26, 2020

Bryan Mezue, Lifestores’ chief executive

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:

The roll out of low-cost pharmacies targeted at the mass-market;
The reduction of fake drug purchase and usage;
The provision of technology-enabled access to medical professionals, health information and drugs; and
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