The medicine store network across Africa has for a long time stayed divided, egging challenges with transportation as well as quality concerns with counterfeit and wrongly specified medications flooding the market. However, these issues facing the supply chain are fixable.
Chibuzo Opara and Adham Yehia, both familiar with the issues of weak pharmaceutical supply chains, aim to scale up Drug Stoc, an e-health procurement platform that tackles these challenges by linking pharmaceutical companies with institutions like hospitals and pharmacies in Nigeria.
DrugStoc is currently on an aggressive expansion plan to provide quality medications to 100 million people in Nigeria. They recently closed a $4.4 million Series A funding and plan to expand into 16 states within Nigeria before extending to other African markets.
The availability of quality medications in Nigeria alone means preventing numerous avoidable deaths, such as those caused by blood loss during childbirth or children succumbing to diarrheal diseases.
In Nigeria, they aim to serve over 100 million individuals, up from the 14 million they currently serve, by expanding to more states. After accomplishing their goals in Nigeria, they plan to move to other countries.
DrugStoc's funding round was led by Africa HealthCare Master Fund (AAIC), with participation from other investors including Chicago-based Vested World and the German Development Bank (DEG).
"We are excited to support DrugStoc. The pharmaceutical market in Africa has enormous growth potential, and we are pleased to back a company that is well-positioned to be a major player in sub-Saharan Africa's development," said an AAIC principal.
Founded in 2015 by Opara and Yehia, DrugStoc's roots date back to 2010 when they created Integra Health, a hospital management company based on Yehia's master’s thesis. They first met as students at Maastricht University in the Netherlands.
Their first company, Integra Health, initially managed 20 hospitals. It was during this time that they realized the gaps in Nigeria's pharmaceutical supply chain. This insight led to the creation of a tech-based platform in 2015 that connected manufacturers with distributors. However, they quickly learned that a platform alone wouldn't suffice. By 2017, DrugStoc officially launched, now focusing on distribution, following a stint at the Stanford Institute for Innovation in Developing Economies.
Looking back, Yehia remarked that just having a tech platform would not have solved the issues in the pharmaceutical distribution chain. DrugStoc also needed a distribution license and to build physical infrastructure, such as distribution centers and customer service hubs.
DrugStoc now connects 400 manufacturers to over 3,200 hospitals, clinics, and pharmacies. Opara says that the platform’s monthly revenue has grown over 1,500% in the last three years, driven by the quality assurance DrugStoc provides. The startup earns a commission on each sale made.
In 2019, DrugStoc won a share ($65,000) of the $1 million Africa Netpreneur Prize Initiative by the Jack Ma Foundation, a competition that awarded startups solving key challenges in Africa. They have also received grants from the Bill and Melinda Gates Foundation and seed funding from Vested World.
With new funding, DrugStoc is expanding to more locations through larger fulfillment centers and transportation networks, offering better logistics for last-mile deliveries. They are also partnering with financial institutions to provide affordable supply chain financing and making further investments in supply chain infrastructure to ensure the safe distribution of sensitive medications.
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