Thursday, May 19, 2022

B2B Pharmacy Marketplace Directo Raises $2.3 Million Seed Round

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Melbourne startup Directo has raised $2.3 million in Seed funding for its B2B marketplace for the pharmacy sector.

The round was led by Sydney seed VC Investible for his networked two-way online marketplace, providing B2C-like price transparency, immediacy and convenience while streamlining logistics and billing.

Founder Gavin Upiter said: Directo’s proprietary enterprise technology platform transforms supply chain management and interactions for more than 500 pharmacies by connecting them directly with more than 80 suppliers and wholesalers of approximately 30,000 products.

“Australia’s pharmacy supply chain is a $20 billion dollar annual market, so we see this platform growing exponentially in the coming years,” he said.

“The $2.3 million investment from key technology investors and Investible will upgrade the platform to ensure it can scale to manage this growth. This includes more AI and the introduction of other value-added services for both buyers and sellers.”

Upiter said thatAustralia’s 6,800-strong pharmacy industry has always been very fragmented with many owner-operators, small groups, franchise networks and various suppliers.

“An average pharmacy may have 50 direct suppliers, in addition to those available from major pharmacy wholesalers,” he said.

“This fragmentation and complexity of supply channels is leaving the industry behind when it comes to refining back-end ordering, inventory management and product distribution.”

The director of Directo said the pharmacy sector in Australia faces additional challenges in its supply chain compared to other sectors.

“These include little corporate ownership, different purchasing groups and levels of compliance, discount structures and government subsidies,” he said.

“Our growth path has accelerated recently as we have worked hard over the past few years to build relationships with pharmacy groups and are now seeing ‘flywheel effects’ resulting in organic customer acquisition.

“An increasing number of pharmacies who see the benefits of engagement are now encouraging suppliers to buy from. These suppliers, after experiencing the benefits it brings, are now encouraging other pharmacies they serve to join the Directo platform to unlock supply chain efficiencies.”

Investable Investment Director Daniel Veytsblit said they have been monitoring Directo’s construction for over two years.

“Clearly Directo is solving a pain point for suppliers, wholesalers and pharmacies. The platform could become an integral part of the industry, bringing significant efficiencies and opportunities to all stakeholders,” he said.

Gavin Upiter said heyalf of the 10 largest private B2B marketplaces in the US share the same business model as Directo and target retailers as buyers with a range of necessities.

“Directo’s business model has proven itself in several other markets. We have added our sector-specific expertise to ensure that we address the historic challenges of the pharmacy sector in this country,” he said.

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