$4.4 million series A funding secured by Nigerian e-pharmaceutical distribution startup Drugstoc for expansion

Across Africa, the pharmaceutical supply chain has remained fragmented for decades. As fake and substandard products flood the market, it leads to challenges, such as sourcing, distribution and quality concerns.

Yet, these issues are fixable facing the supply chain.

Chibuzo Opara and Adham Yehia are all too familiar with the problems of poor pharmaceutical supply chains and, hence, they are planning to widen the reach of DrugStoc.

The DrugStoc is an e-health drug procurement platform.

By linking drug companies with institutions such as hospitals and pharmacies in Nigeria, it eliminates these challenges.

To deliver quality pharmaceutical products to 100 million people within Nigeria, DrugStoc is currently on an aggressive expansion plan.

It moves to grow beyond Lagos, the economic hub of the West African country, with the startup plans to expand into 16 states within Nigeria.

Outside Nigeria into other markets within Africa, it has a more grandiose plan of venturing.

The availability of high-quality pharmaceutical products can avert thousands of deaths even within Nigeria alone.

Like, death due to blood loss during childbirth or children succumbing to diarrheal diseases.

What you should know about DrugStoc

At Maastricht University in Holland, these two entrepreneurs, Opara and Yehia, first met as students.

Opara and Yehia founded Integra Health, a hospital management company, in 2010, based on the master degree project of Yehia.

While Yehia was pursuing a masters in health innovation management, was looking for an advisor for his project and Opara was completing his PhD studies when they met.

To match the need of Yehia for an advisor having experience in the healthcare sector in Nigeria before switching careers to economics and finance, Opara had practised as a doctor for about six years.

Yehia had been part of the management team in the hospital owned by his father in Lagos. He had experience with the issues faced by the hospitals in Nigeria too.

For some of the challenges he saw in the industry, he sought to explore the possible solutions for his master project.

In 2016, under Stanford’s Institute for Innovation in Developing Economies, DrugStoc was incubated though launched in 2017.

Jack Ma’s flagship entrepreneur program in Africa DrugStoc emerged as one of the ten finalists for the Africa Netpreneur Prize Initiative.

At the Nigeria Health Excellence Award in 2019 and 2021, it also won the award for the Technology Enabled Distributor of the year.

Yehia said, “It was an immediate bond. So when we first met, we actually ended up spending around six hours together in my apartment, going over the problems in Nigeria’s healthcare system.”

“It was then, very early on, that we both decided that we are 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 — we understood – that the system itself was the problem.”

DrugStoc Secures $4.4 Million in Series A Funding To Boost Expansionary Drive.

Led by Africa HealthCare Master Fund (AAIC), Chicago-based venture firm Vested World and German Development Bank (DEG), Nigerian e-health pharmaceutical distribution startup DrugStoc has secured $4.4 million in Series A funding round.

The secured fund will enable the startup to expand access to quality medicines, as per a press release by the company, as seen by Nairametrics.

For financing healthcare providers in Sub-Saharan Africa, the company will provide a sustainable supply chain.

To get quality medicines at affordable prices and boost superior quality control systems, it will allow the cloud-based platform, with International Organization for Standardization (ISO) certification on Good Distribution Practice.

What they are saying

The Director at AAIC, Nobuhiko Ichimiya, said, “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 well-positioned to be a key player in the sector’s growth in sub-Saharan Africa.”

Liam O’Connor, who is also among a group of individual Silicon Valley investors, said, “I am excited to support DrugStoc’s innovative work building a reliable, resilient, and high-quality pharmaceutical supply chain across Africa. I am confident that DrugStoc will succeed in making a critical healthcare difference that will help save lives.”

Chibuzo Opara, co-founder and CEO of DrugStoc, highlighted innovation to solve the supply chain challenges and as an opportunity in the growing market.

He said, “Fragile and resource-challenged healthcare systems require a radically transformative set of market-based strategies to expand access to healthcare. The DrugStoc way re-engineers the value chain digitally, improving and expanding access to healthcare at the same time.”

“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.”

By Africa HealthCare Master Fund (AAIC), the funding round of the DrugStoc led. The German Development Bank (DEG) and Vested World are the other investors.

Connecting manufacturers with distributors

DrugStoc was born out of a hospital management company IntegraHealth, founded by Opara and Yehia.

Opara and Yehia had seen gaps in the pharmaceutical supply chain in Nigeria. And they have decided to fill the gaps by resolving the concern problems.

Then they have planned and proceeded to connect pharmaceutical manufacturers with distributors by launching a technology-based platform.

They had launched DrugStoc officially in 2017.

The startup is not simply connecting pharmaceutical manufacturers and distributors. Instead, it is directly buying from the manufacturers and supplying to hospitals & pharmacies.

To help pharmacies scale their businesses, they also have a channel with collateral-free loans.

DrugStoc is currently linking with about 400 manufacturers and 3,200 doctors, hospitals and pharmacies with the help of the healthcare IT company.

For every sale, the DrugStoc is earning a commission. And it has a record of over 9 million prescriptions of their products dispensed so far.

According to the CEO, Mr Opara, the monthly revenues of the platform have grown over 1500% in the last three years. He added, it can be attributed to the anti-counterfeit assurance that comes with their products.

Meet the pharmaceutical needs of 100m Nigerians.

DrugStoc plans to deliver quality pharmaceutical products through healthcare IT solutions to 100 million people within Nigeria with the new investment. It is an exponential increase from the 14 million they are currently serving.

With more fulfillment centers and expanded transit points & routes, the plan includes expansion into 16 Nigerian states outside Lagos.

To make last-mile deliveries, it also wants to provide better logistic options.

Furthermore, DrugStoc aims to increase access to a sustainable supply chain, building partnerships with financial institutions financing.

It is to plan to enhance the safe distribution of perishable products – in addition to more investments in cold chain infrastructure.

Conclusion

Currently, they serve to cover just around 14 million people in Nigeria. In Nigeria, they intend to expand beyond 100 million by expanding to about 16 states.

Beyond Nigeria, DrugStoc is also planning to expand its operations. Once they complete that expansion, they will be training their sights on other countries.

With Africa’s pharmaceutical industry set to be worth $70 billion by 2030 to change the way healthcare providers interface with the pharmaceutical market and revolutionize sub-Saharan Africa’s access to quality pharmaceuticals, the health tech startup will now double down on its vision.