Medical startup, mPharma is making a critical expansion into East Africa. The Ghanaian startup today disclosed the acquisition of Kenya’s second largest pharmacy retailer, Haltons, Quartz Africa reports. This is the latest acquisition news involving an African startup since the start of 2019.
Interesting: in Kenya, a once-digital-health start up buys the country's second largest pharmacy chain. Is this the healthcare version of AOL buys Time Warner? https://t.co/UbcwAIsmln— Joris van Dam (@DamJoris) March 28, 2019
Founded in 2013 by Gregory Rockson (CEO), Daniel Shoukimas (CPO) and James Finucane (CTO), mPharma is a data and cost management platform connecting Africans to affordable quality prescription drugs. The company also runs a platform that helps pharmacies keep stock of their inventories.
Since its launch, the company has grown relatively quickly. It now operates in four countries and supports over 250 pharmacies. The recent acquisition however will aid the company extend its footprints into East Africa. According to Quartz Africa, mPharma bought Haltons for under $5 million.
MPharma’s Haltons acquisition is not just in line with its expansion plan, it also supports a new business approach. The startup aims to revamp customer-pharmacy experience, offer new services and provide cheaper drugs.
According to the company, pharmacies have long neglected the idea of improving customer experience and providing more affordable drugs. More and more pharmacies across the continent struggle to stay afloat because of these.
Ghana's mPharma buys Kenya pharmacy Haltons Quartz MPharma, the six-year old Ghanaian startup that manages prescription drug inventory for pharmacies and their suppliers, is buying Kenya's second-largest … https://t.co/kCmYvUozmC via @theafricamentor— Africa Mentor (@TheAfricaMentor) March 28, 2019
Meanwhile newer and better customer service products could have better impact on patients and the community. Yet, due to emphasis on profits despite high cost of drugs, few pharmacies can afford to pursue this path.
But the Haltons acquisition could change this and show other pharmacies new services that can be offered.
“Haltons will serve as testing ground for us to develop patient-centered services we can provide to our franchise pharmacies. This way we can encourage lower margins and pass the savings on to the customers,” mPharma says.
mPharma Deal Shows M&A Deals Are Now A Thing For African Startups
Meanwhile, on a macro view of things, the Haltons acquisition is the third of its kind involving an African startup. In fact, this is the third deal this month.
Just last week, OneFi, owners of the popular lending app, Paylater, concluded the acquisition of payments company, Amplify. OneFi is looking to grow its product offerings by leveraging Amplify’s technology tools like AmplifyPay.
Another notable acquisition so far is Uber’s over $3 billion takeover of Egypt’s Careem. Now these deals are interesting particularly because they are unprecedented.
Despite the fact that venture firms and other investors have pumped cash heavily into African startups, exits have been extremely difficult. Indeed over the last few years, startup acquisition has been almost non-existent in African countries excluding South Africa.
On the one hand, the new acquisition trend increases confidence that African startups are indeed valuable. And this is crucial for investors who have pumped money into startups like PayStack, Flutterwave and Paga. Notably, these three startups have raised more funding than OneFi and MPharma. So with the disruption these fintechs are bringing, it won’t be surprising if a bigger company proposes to buy them up.
One the other hand, the recent acquisition trend shows startups now value such deals as a path to growth. The quest and cost of building proprietary technology or scaling can be reduced with acquisitions. And it appears startups are increasingly recognising this now.
No doubt it will help to make them even more valuable.
Featured image courtesy of Quartz Africa