Lifestores Secures $3M pre-Series A Round for Expansion

Nigerian health technology company Lifestores Healthcare has raised $3 million in a pre-Series A round led by Health54, the CFAO Group’s healthcare-focused corporate venture capital arm.

A few previous investors as well as some new ones, such as Lionbear Conduit Capital, participated in the round, with Aruwa Capital Management serving as the supporting lead. The financing round was 50% oversubscribed, according to Lifestores.

Andrew Garza and Bryan Mezue established Lifestore in 2017, with the goal of providing Nigerians with access to trusted drugs through a chain of roughly six retail pharmacies. Its solution came at the right time and was crucial, particularly in Nigeria where 20% to 40% of drugs are bogus. By buying at the top of the supply chain and putting supplies through customary checks, they were able to verify the legitimacy of the drugs.

However, Lifestore’s business model rarely had a fundamental software component at this point in its business cycle. However, as the company expanded and its founders developed knowledge of the pharmaceutical consumer market, they started to use technology to address some internal business issues. They ultimately chose to implement one of these solutions across the board, which resulted in the opening of OGAPharmacy, the business’s online pharmacy marketplace for Nigerian businesses. The retail locations of Lifestores continue to be the testing grounds where the general requirements of pharmacies are assessed in order to develop solutions for the OGApharmacy product.

Lifestores is active in the $45 billion underserved African pharmaceutical industry. A balanced healthcare system on the continent is nonetheless hindered by a number of infrastructure issues, including fragmented supply chains brimming with counterfeit drugs, despite the market’s enormous potential to quadruple within the next ten years. In Nigeria, where there are over 217 million people, only 3% of them have health insurance, and the supply chain for medical products is incredibly fragmented, these issues are particularly severe.

More specific issues for pharmacies in the nation include inventory acquisition, credit availability, and improved pharmacy management systems. OGApharmacy has transformed these particular pain issues into its value propositions.

The online market consolidates hospital and pharmacy requests for pharmaceutical supplies, allowing them to get real pharmaceuticals at up to 15% off retail prices thanks to an effective supply chain structure.

According to Lifestores, OGApharmacy has had growth of 25% MoM since its establishment and currently serves up to 10% of Nigerian pharmacies. The reinvestment by Aruwa Capital Management, whose CEO, Adesuwa Okunbo Rhodes, talked eloquently about OGApharmacy, was motivated by this exceptional growth rate.

She stated in a statement obtained by TechCabal that “after an initial investment 18 months ago, we have been impressed with Lifestores’ exceptional growth rate and are proud to continue to support this diligent team offering market-relevant solutions.”

About 50% of the pharmacies on OGApharmacy are owned or run by women, in keeping with Aruwa’s gender lens policy. We are thrilled about the new strategic collaboration and anticipate Lifestores’ continued success,” he added.

Health54, the lead investor in the round, was notable for its being its first investment in Nigeria. Health54, established as the CFAO group’s health-specific corporate venture capital (CVC) vehicle, is focused to high-growth businesses serving Africa’s healthcare industry. By utilizing its extensive African healthcare network to increase the scale of its investees, the healthcare investment firm is on a mission to provide business support and financial empowerment to startups addressing the issues surrounding medical supplies and services for Africans.

“We’re excited and thrilled to make our first investment in Lifestores and Health54 in Nigeria. We were pleased by Bryan and Andrew’s practical knowledge gained from managing several retail pharmacies in Nigeria. With OGApharmacy, they have created a top-notch distribution platform in just two years. As a strategic partner, we’re excited to collaborate and share the advantages of our vertically integrated pharmaceutical supply chain so that we can provide high-quality primary healthcare to more patients in Nigeria and beyond, according to Côme Vercken, managing director of Health54.

Out of the 7,000 pharmacies that are registered in Nigeria, Lifestores plans to increase its clientele of pharmacies from the current number of 750 to roughly 2000 using the money it has raised.

By 2023, they will be able to double its customer base from 100,000 to 400,000 thanks to this. They will also open a new operations center in Lagos to handle the logistics and sorting requirements of the company.

The business will enhance its patient management activities, credit options, AI-driven predictive ordering, and pharmacy management systems going forward. Additionally, Lifestores is aiming to trial B2C and B2B2C services like pharmaceutical distribution, care management, and patient savings.

Bryan Mezue, co-founder and CEO of Lifestores, said on the funding round: “We’re happy to have Health54 join our mission of democratizing access to good, inexpensive primary healthcare in sub-Saharan Africa, together with current partners, such Aruwa Capital and the Lionbear consortium.”

Lifestores co-founder Andrew Garza reaffirmed that the company’s aim is to assist the crucial work that pharmacists all over the nation perform in a statement provided to TechCabal.

“The great majority of Africans will seek treatment at their neighborhood pharmacy. We want to provide the essential services that pharmacists, the unsung heroes of African healthcare, need to obtain and give their patients safe and affordable pharmaceuticals, he said.

“Our mission extends beyond simply providing medications and maintaining price stability. Pharma wholesalers in Nigeria are essentially the “banks” of the healthcare supply chain, and they have a large impact on the national economy. We are able to fuel the expansion of our partners and expand patient access to high-quality treatment by optimizing how we issue credit to our healthcare provider partners and modernizing patient access to health financing, Garza continued.

Before establishing Lifestores Healthcare, Garza and Mezue, graduates of the graduate business schools of Stanford University and Harvard University, respectively, had prior employment as staff members of the multinational management consulting firm Bain & Company.

The pair have real-world experience in the pharmaceutical industry despite not being pharmacists themselves. For Nigeria’s Chi Pharmaceuticals, Garza previously served in the capacity of supply chain manager, while Mezue previously served as an advisor to a large pharmacy run by a cousin.

Although Lifestores’ founders are non-technical, they have demonstrated their capacity to scale software solutions to almost a thousand firms, which adds an unusual perspective to the company’s tale. The current funding preference of international accelerators is for firms to have at least one technical co-founder, therefore this is a break from that practice. Technicality is only one component of the equation, in the opinion of Garza and Mezue. The other side is understanding the product and articulating solutions, and they have excelled at both while collaborating with a strong technical team.