At the third edition of Pitch2Win, an event that connects startups to investors, health-tech startup Pharmarun won $10,000 in equity-free investment. Here is all you need to know about the startup and its co-founders, who have also been friends for 20 years.
In less than five minutes, Teniola Adedeji convinced Kola Owodunni, Yuzuru Honda, Eloho Omame, Hiro Mashita, and Kola Aina, the five judges of Pitch2Win 2023, that her health tech startup PharmaRun was most deserving of the prized $10,000 equity-free funding. PharmaRun delivers medication on-demand to the doorsteps of customers. It competed for this funding with 14 early-stage startups that pitched AI, blockchain, fintech, e-commerce, and logistics solutions at Pitch2Win, an annual event that aims to connect startups to potential investors.
This is not the first time Pharmarun has received external investment. In 2021, the same year it officially launched, the startup received an angel investment from Fedha Capital. But over a phone call, her best friend of 20 years and co-founder, Funmilola Aderemi, told me that Teniola had registered “Pharmarun” as a business name since 2016. By that time, Teniola had rounded up an investment banking internship at Bank of America Merrill Lynch and was working as a pharmacist at the National Food and Drug Commission (NAFDAC). Amused at the recollection of what now looks like a self-fulfilling prophecy, Teniola responded, “I just thought the name was really cool. I wanted to own a pharmacy of my own and call it that someday.”
Pharmarun started out as a labour of love. “Too often, I heard people talking about how only pharmacies situated on the island [a more bourgeois part of Lagos and miles away from the mainland] had a medication that they needed,” recalls Teniola. Working at a pharmacy herself, she witnessed the frustration of customers when her workplace ran out of stock for a particular drug. Teniola took it upon herself to assist customers in finding the medication elsewhere, even extending her help to family and friends. As word spread, people started reaching out to her on WhatsApp, asking her to locate specific drugs and deliver them.
The demand for her assistance increased significantly during the COVID-19 pandemic when movement restrictions made it even more challenging for individuals to access pharmacies. “That was when I realised that this could grow into a business,” Teniola reflects. She sought the assistance of her friend, Funmilola, who at the time was a senior product manager at a logistics company, MAX. Late-night calls became a regular occurrence as they collaborated on designing various aspects of the web platform where customers could order.
Teniola disclosed that they had been concerned that no one would trust them enough to make payments on the website until they had their first paying customer. She had previously operated primarily through WhatsApp and relied on word-of-mouth referrals. To instil confidence in potential clients, the website was designed to include features such as “Speak to a pharmacist”, to assure users that real people were behind the platform. Pharmarun’s customer base has expanded to include individuals, hospitals that need to send refills of prescriptions to their patients, as well as insurance companies seeking to ensure timely refills for their policyholders.
The business’s needs grew with time, so Teniola began to search for a co-founder to lead Pharmarun with her full-time. Even though Funmilola was spending plenty of time helping her with the product, Teniola was hesitant to ask her to leave her full-time job at MAX. But she eventually did, and her best friend said yes to becoming her co-founder. Flashing back to that moment, Funmilola said, “It felt natural and almost like a promotion from a consultancy position to a co-founder position. Moreover, I enjoyed working on the product with Teniola, and like her, I was also passionate about the problem.” Teniola, with seven years of experience as a pharmacist and pharmacy operations manager, is the CEO of the startup, while Funmilola, due to her years of experience in product management, is the Chief Product Officer.
Going the extra mile
Both co-founders believe that Pharmarun needs to be more than a drug store. “If people know where to find a drug but do not have any money to buy it, they still lack access to medication,” Teniola mused on a call with me. Pharmarun also finances medication for its customers through embedded buy-now-pay-later (BPNL) services. “Through partnerships with some BNPL companies, customers who are out of cash to pay can still access medication.” Because the BNPL services are embedded at the checkout, they are not run on the balance sheet of Pharmarun, so the startup doesn’t need to work on recovering the loan from customers.
Pharmarun’s operational model may evoke comparisons to Jumia, as users can simply place an order and have medications delivered to their doorsteps. However, unlike Jumia’s platform, users do not have to choose from an array of pharmacies like Medplus. When customers search for a specific drug on the Pharmarun platform, it assists them in finding the best price from any pharmacy that has the desired quantity of medication. “This is why we are onboarding as many legitimate pharmacies as we can,” Teniola said. Currently, Pharmarun collaborates with over 80 pharmacies across the country, with a significant presence in cities such as Lagos, Abuja, Port Harcourt, Ibadan, and Uyo. It is working on partnering with more pharmacies.
Nevertheless, the process of onboarding these pharmacies has not been without challenges. Adedeji highlighted the stringent onboarding process to ensure compliance with industry standards, ensuring user protection. Additionally, many of these pharmacies are not tech-savvy, necessitating training on the web platform used to fulfil orders. Overcoming these obstacles is crucial as Pharmarun actively works to expand its network of partner pharmacies. During her pitch, Teniola mentioned the need for significant funding, estimating up to $500,000, to facilitate the onboarding of more pharmacies.
Staffing also posed a significant hurdle as the customer base grew. Teniola acknowledged the difficulty of finding individuals with the necessary skills and shared passion. Despite the challenges, Pharmarun has grown from its humble beginnings with Teniola and her best friend and co-founder Funmilola to a team of 15 dedicated staff members.
“We are going beyond medication,” Funmilola said to me. Pharmarun envisions a broader impact, particularly for communities that seem isolated from urban communities like Makoko in Lagos. “We are building Pharmarun to be able to deliver all essential medical health products to those in need. Even beyond Nigeria, because what we have is a very replicable solution. In five years we will be working either independently or through collaborations, to address healthcare challenges across African countries,” she concluded.
The other 14 startups that competed alongside Pharmarun at the Pitch2Win 2023 competition include blockchain and ed-tech startup Akowe, health-tech startup Primed E-Health, fintech startup Tyms Africa, mobility tech startup Motor Africa, B2B fintech startup Bridger, e-commerce startup Check Retail, blockchain powered fintech startup Crunch Network, fintech startup Oystr Finance, blockchain startup DIAGON STUDIOS LTD, cloud infrastructure startup PipeOps, AI startup ZeroComplex AI, blockchain startup Centiiv, logistics startup Shiip, and health tech startup Uburu Health.
ZeroComplex AI, an AI startup dedicated to streamlining the integration of AI into existing applications was the runner-up in the competition. Oystr Finance which facilitates easy access to alternative financial data, creditworthiness assessment, and borrower identification verification came third.