Ghanaian startup mPharma, which manages prescription drug inventory for pharmacies and their suppliers, has raised GHS 98,111,828 ($17 million) in its latest funding round and announced the appointment to its board of Helena Foulkes, former president of CVS, the largest pharmacy retail chain in the United States.
The Accra-based company, founded by chief executive Greg Rockson seven years ago, has received the funding from CDC Group, the UK’s development finance arm, alongside several of its previous investors including Dr. Daniel Vasella, ex-chief executive of Novartis, Silicon Valley investor Jim Breyer and Dompe Holdings, the family office of the Italian pharmaceutical giant.
Rockson described the round as “opportunistic” as the company was keen for the chance to work with a development finance institution with deep roots in Africa like CDC. He says mPharma’s work sees it increasingly interacting with government agencies on the continent. “Bringing a DFI with extensive government contacts across Africa would improve our appeal and help strengthen our corporate governance because of the ESG [environmental, social and governance] rules under which they operate.”
CDC has typically acted as a “fund of funds”, by putting its cash into large funds, such as private equity, working in developing countries, but the Catalyst Fund, previously under auspices of its sister UK development agency DfID, has been investing directly in businesses.
To date, mPharma has raised over $40 million since its seed round in 2015. Last year, it used some of those funds to acquire Kenya’s second-largest pharmacy chain, Haltons. Rockson says it has expanded the number of outlets to 30 from 17 at the time of acquisition and seen revenue double. “We had mapped out a plan for expansion when we bought Haltons and soon paid off its debt and owed salaries to build trust with the staff, but the lockdown has cut our hours and slowed growth.”
MPharma was started to significantly improve the efficiency of pharmaceutical supply chains in African countries. Its proprietary Vendor Management Inventory (VMI) system is already being used in over 250 pharmacies in Ghana, Nigeria, Kenya, Zambia and Zimbabwe.
As mPharma’s retail roots deepened, Rockson says getting retail experience on the board had been one of his priorities and had been aware of Foulkes ever since reading a Fortune magazine about her work at CVS.
“I was intrigued by the role she played in banning the sale of tobacco at CVS. This is a decision that cost the company over $2 billion in sales but was important if CVS was to put the health of consumers first,” Rockson wrote in a company post.
Foulkes, who was introduced to Rockson by board member and early Facebook investor Jim Breyer, spent 25 years at CVS, before she left in February 2018 to run Hudson Bay, the North American retail group parent of Saks Fifth Avenue. She stepped down from the role in March.
“The mission of mPharma to make pharmaceuticals more affordable and accessible is striking,” says Foulkes. CVS is well known in the US for its rewards loyalty program and using customer retail data to target promotions. “I’m interested in the different ways this young company can grow, they have their own chain, loyalty programs, there’s plenty of potential,” says Foulkes.
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