Egyptian online pharmacy Agzakhana secures investment from Vodafone
Note: photo submitted by Agzakhana, credit: Batool Al
Daawi
Late last week, Agzakhana, Egypt’s first online
pharmacy, announced a new round of funding from Vodafone Ventures,
made for an undisclosed amount in exchange for 22.22% of the
company.
“We first saw the promise in Agzakhana when they competed in
Google’s yearly competition, Ebda2. They've got an interesting
business model, and they've already made a million pounds in annual
turnover,” Mohammed Al-Ayouti, Vodafone xone’s Senior Manager, told
Wamda.
Against the backdrop of Egypt’s current political turmoil, “It's
very important for us to prove to the investment community that
Egypt is open for business,” says Al-Ayouti. Vodafone also
generally sees healthcare as a critical segment, he says; the
telecommunications company has also partnered with several pharma
companies to develop on a
few mHealth initiatives around the globe.
Not that securing funding was easy, says Agzakhana founder Ahmed
Shabana, who founded the company along with his co-founder and
brother, Sherif Shabana, in 2008. “We’re very vertical and
very niche, and healthcare in general is a very hard segment to
raise capital in, in Egypt,” he says. “But we’re lucky to have a
very direct model."
The company works with several local pharmacies, including “one of
Egypt’s biggest chains,” to list their inventory online, allow
customers to shop, and then have orders delivered from the nearest
location. When customers order items from multiple pharmacies,
Agzakhana uses Aramex to retrieve and deliver items.
For this reason, sales have, in fact, gone up recently. “Maybe
with the crises, people feel safer, and traffic has been crazy, so
perhaps they feel it's smarter to not go to the actual pharmacy,”
says Shabana.
Shabana himself has built the platform from the ground up, working
“a lot of jobs”- including stints at GlaxoSmithKline and
AstraZeneca, and consulting gigs for Orascom and a medical imaging
company based in San Diego- to finance the startup.
A pharmacist who hails from a family of pharmacists, he saw the
need to go online. “I saw an opportunity to transform the physical
pharmacies of my family into an online pharmacy. I thought, it's
the right time, and I had the right resources. I really have a
passion for technology,” he explains.
Today, the site monetizes via ads, and by working as a sales
channel for large retailers like Nestle and Reckitt Benckiser,
advertising on Google AdWords to direct people to their products on
Agzakhana.
The site typically sees a 2-5% conversion rate; now that Google
Adwords has verified and enabled the site to advertise as an online
pharmacy, he expects to see rates improve further.
Next, Agzakhana plans to develop a POS technology for
pharmacies that will enable better communication and inventory
tracking. "We're planning on partnering with as many medium
pharmacies as we can," says Shabana, offering the stores a Vodafone
internet package bundled with the technology.
Shabana also hopes to eventually expand outside of Egypt: "We're
researching which markets have the least restrictions while having
similar customer needs."
Improvements at Vodafone
Earlier this year, Vodafone Ventures came under some criticism
from members of the
Egyptian community, for being slow with releasing investments
to its first round startups. This process has dramatically
improved, says Al-Ayouti.
“We had some challenges in the beginning, stemming from the
complexity of launching a VC, and especially due to difficulties
dealing with the government,” he says.
In the meantime, Vodafone did everything it could to offer loans to
entrepreneurs to bridge the waiting period, and to improve the
process. “We’ve learned a lot in the last 10 months about how we
can do things better; we’ve learned the best approach to government
red tape, and judging by the feedback from our recent investments,
I believe we're on track.”
A new development revealing how Vodafone has boosted its efficiency
will be announced soon, he says. “We love and support our
entrepreneurs, and never want the process [of receiving funding] to
be tough on them.”