Lifestores Healthcare raises $3m pre-series A to fuel expansion across Nigeria

Nigerian health tech startup, Lifestores Healthcare has announced that it has raised $3 million in a pre-seed funding round. The latest round was led by Health54, the healthcare-focused corporate venture capital arm of CFAO Group, with participation from Aruwa Capital Management and other existing investors.

Commenting on the raise, Bryan Mezue, Co-founder & CEO of Lifestores Healthcare said,

We’re thrilled to have Health54 join our mission of democratizing access to quality and affordable primary healthcare in sub-Saharan Africa, together with existing investors, such as Aruwa Capital and the Lionbear consortium,

With the new funding, the startup hopes to improve its software capabilities and expand into other Nigerian markets. In 2020, the startup had a similar plan when it raised N365 million in a seed round led by Flying Doctors Nigeria.

However, in addition to improving their services and expanding into other Nigerian markets, the health tech company claims that this latest round of funding will also allow them to expand their sales and engineering teams, as well as their senior management.

Read Also: Lagos-Based Health Startup, Lifestores Raises N365 Million to Expand Drug Distribution to Other Parts of Nigeria

About Lifestores Healthcare

Lifestores Healthcare, founded in 2017 in Lagos, Nigeria, by Bryan Mezue, Ken Ahaotu, and Andrew Garza, has continued to pursue its mission of transforming healthcare outcomes for underserved populations and ensuring a more effective pharmaceutical supply distribution.

While the African pharmaceutical market has grown tremendously and is expected to grow at a 10% CAGR to $100 billion by 2023, it is plagued by highly fragmented and undercapitalized supply chains rife with counterfeit medications, which kill thousands of patients each year.

In Nigeria alone, about 20-40% of medications distributed and consumed are counterfeit. This is one of many issues Lifestore Healthcare is attempting to address in the Nigerian ecosystem, especially through its OGA pharmacy services.

Andrew Garza, COO & Co-founder of Lifestores Healthcare, explained the scope of the health tech startup saying,

Our scope goes beyond merely distributing medicines and stabilizing prices. Essentially, pharma wholesalers are the ‘banks’ of the healthcare supply chain in Nigeria, and their impact on the overall economy is considerable. By optimizing how we extend credit to our healthcare provider partners and modernizing patient access to health financing, we are able to power the growth of our partners and increase patient access to quality care

Plans and future goals

OGApharmacy, a B2B pharmaceutical marketplace run by Lifestores, offers pharmacies 10–20% group discounts, innovative supply chain software, and the assurance that the drugs they are selling are genuine and not counterfeits.

More than 10% of Nigeria’s pharmacies are registered users of this market, which has seen monthly market growth of 25%.

By 2023, Lifestores hopes to reach four times as many patients—from 100,000 to 400,000—by increasing the market share of OGApharmacy customers from 10% to 25% of Nigeria’s overall market.

With this new funding, Lifestores will launch new technology features as part of its B2B offerings, including pharmacy management software, AI-driven predictive ordering, advanced credit offerings, and patient management initiatives, in addition to opening a new processing centre in Lagos.

Meet the investors

Health54 is the Corporate Venture Capital fund of the CFAO Group, which is the largest healthcare distribution channel in Sub-Saharan Africa. The VC firm invests in and supports the growth of startups that provide innovative healthcare services and technologies across Africa.

This funding round, which was 50% oversubscribed, is the first for Health54, CFAO Group’s corporate venture arm.

By enabling operators to give patients in Nigeria stable access to dependable and affordable medical supplies and services, Lifestores exemplifies Health54’s core mission.  Lifestores hopes to leverage on CFAO Healthcare’s existing wholesale distribution capabilities in Nigeria and throughout Africa, as well as Health54’s expanding network of health services innovators and providers.

For Health54, it is committed to promoting innovative solutions and acting as a business partner by leveraging Africa’s largest healthcare network to assist its investees in scaling up.

Commenting on the raise, Côme Vercken, Managing Director, Health54 said,

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. 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.

Aruwa Capital Management expressed their appreciation for the or before fundraising as well.

They were particularly impressed with the growth, rate, and adoption of Lifestores services from a gender perspective, as approximately half of the pharmacies on OGApharmacy are owned or led by women.