NIGERIA – Nigerian healthtech startup Lifestores Healthcare has secured US$3 million in an oversubscribed pre-Series A round that will be used to finance the company’s activities as it expands its pharmaceutical marketplace across the country.
Lifestores’ seed round becomes Health54’s first investment on the continent, and the firm is a healthcare-dedicated corporate venture capital (CVC) vehicle of CFAO Group (part of Toyota Tsusho), which has the largest healthcare distribution channel in sub-Saharan Africa.
According to the Nigerian startup, the investment round was led by Health54, the healthcare-focused corporate venture capital arm of CFAO Group, while Aruwa Capital Management was the supporting lead in the round, with participation from some existing investors like Lionbear Conduit Capital.
The digital healthcare company further said that the investment round was oversubscribed by 50%, adding that it will use the funding to expand in Nigeria, enhance its software, and target new client demographics as well as grow its senior management, sales, and engineering teams.
Lifestores Healthcare was founded in 2017 by Chief Operating Officer Andrew Garza and Chief Executive Officer Bryan Mezue as a chain of retail pharmacies using technology to provide various services. Currently, the firm provides its services through a network of more than 750 outlets.
In addition, there are two B2B components to Lifestores particularly the first part is the B2B marketplace called OGApharmacy that was launched during the pandemic in 2020 while the other is an ERP system that pharmacies and dispensaries can use to run their operations.
“OGApharmacy allows pharmacies and hospitals to aggregate their purchasing needs, with which Lifestores negotiates with suppliers for the lowest possible price on high-quality medications, thereby getting 10 to 20% discounts for them,” the official statement said.
The firm announced that it is experiencing a 25% monthly marketplace growth and counts more than 10% of Nigeria’s pharmacies as registered customers.
It plans to expand its market share to 25%, which will increase the number of patients reached by 4x from 100,000 to 400,000 by 2023.
Speaking on the investment, Côme Vercken, Managing Director, Health54, lauded the partnership between Health54 in Nigeria and Lifestores while acknowledging 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 with quality primary healthcare,” he said.
“To drive this growth, Lifestores will open a new Lagos processing Centre and 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,” Vercken said.
This investment will see Lifestores leverage Health54’s increasing network of health services providers and CFAO Healthcare’s existing wholesale distribution capabilities in Nigeria and across Africa should it plan regional expansion down the line.
“But for now, the healthtech wants to fuel growth in Nigeria, improve its software capabilities, reach new customer segments and ramp up hiring across sales and engineering teams and senior management,” he concluded.
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