Bengaluru based Healthtech Startup Saveo is empowering traditional pharmacies through their technology-led innovation
Medicine availability has been a challenge that India has faced even as we move into Industry 4.0. While other sectors flourished technologically, the pharmaceutical industry was lagging owing to its highly fragmented nature. Saveo’s journey started with this. They searched for the problems at the grassroots experienced by last mile pharmacies and created a platform with a promise that India would see no prescription bounce.
CXOToday sat down with Deepak Tiwary, Lead Financial Planning and Analysis, Saveo Healthtech to understand how Saveo has made sure that medicines reach the furthest corner of all cities.
- What is the best description of Saveo Healthtech?
Ans: A B2B managed marketplace for pharmacies, Saveo is on a mission to build a strong healthcare ecosystem in India. This is done by empowering the traditional pharmacies with the help of building a reliable, scalable and efficient healthcare supply chain. The company is currently serving nearly 40+ district centres, 100+ towns and villages and receives 17Cr of monthly revenue.
- What are the major challenges that the pharmaceutical industry is facing currently and how is that problematic?
The challenges posed to the healthcare industry is a bit of an irony. Even though India is considered to be the ‘pharmacy of the world,’ due to the amount of medicines it provides globally, however, pharmacies on ground are struggling to even fulfil 60% of the prescriptions. Moreover, 18% of deaths that occur in India happen due to treatable diseases.
As we navigated through the pandemicc, it has helped uncover the highly fragmented nature of the pharma sector through various reports regarding the delays in routine treatment and healthcare delivery, rising expenditure, shortage in supply of medicines. Tackling all these challenges has made managing the supply chain process a bit of a complex process.
This issue is mainly because at every stage, a wide range of stakeholders are involved to accomplish. The procurement and distribution of products and services to reach the end user is a process in which there are many hoops to jump through. It’s important here to note that pharma supply chain, unlike FMCG, distributors work independently, can hold as many companies they want, focus on SKUs they want to sell, and supply to any location in India. This leads to limited suppliers with good SKU coverage, and multiple hoarding in the layer. The more we move away from the city, the more serious the problem becomes.
- What newer technologies are being adopted to increase the adeptness of the Indian pharma supply chain?
Ans: Historically speaking, the medical industry is highly fragmented. If we look at India, the Indian pharmaceutical industry is highly disintegrated, with over 8.5 lakh pharmacies and 70,000 distributors. Adding to this, the market being technologically handicapped poses a big issue.
Saveo, being the brainchild of IIT Graduates was incubated to serve the pharmacies and empower them. They did this by running a vertically integrated full stack managed marketplace model to provide better, faster & cheaper procurement to pharmacies and converting quality suppliers into dark stores. Their technology is working towards streamlining the pharmaceutical supply chain by building the most transparent ecosystem by offering the highest fill rate in India while educating and empowering 8.5 lakh micro entrepreneurs and distributors with technology and sustainability.
However, at Saveo, we also understood that only solving the issue of supply will not completely eradicate the problems that come ingrained in the pharma supply chain. It becomes necessary to couple data flow, digitization and impact learning with supply. To achieve this vision it is important to first build the largest network of pharmacies and doctors, following which we should work towards empowering them with white labelled technology like that of Shopify. The company also recently launched Carin (their own Neo-pharma brand) that is adding digital services with the pills making it holistic and patient-friendly.
- How Saveo Healthtech is empowering the pharmacies by re-engineering the complete supply chain?
Saveo is a ~2 year old startup with a network of 10k pharmacies across Karnataka, Andhra Pradesh, Telangana and Tamil Nadu. We serve nearly 40+ district centers, 100+ towns and villages. Our fill rate has been helping pharmacies generate 15-20% additional revenue since they are able to fulfil more prescriptions now. Our dark store technology also helps the suppliers bring about 50-75% additional revenue since now they are able to sell across the state with the same infrastructure.
In addition to this, our logistics technology has enabled us to deliver across tier 2 to tier 5 towns cascading the fill rate effect. Due to this, we are able to service any town in the state within 24-30 hours, apart from serving the city within 4-5 hours.
- What strategies is the company looking at for foraying to the other regions in India? What goals has the company set for the upcoming years?
To serve the pharmacies better, The strategy at present is to go deeper in the existing states, open new hubs in the nearby states so that by March’23 we have 12 hubs in India which covers 500+ cities/towns and delivers to 50,000+ pharmacies. We aim to first serve the new areas from a nearby existing hub such that the pharmacies start experiencing the power of procurement, and once the revenue reaches the benchmark, we open a dedicated hub in that new state.
Furthermore, Saveo is doing USD 22MM$ ARR, 15% take rate in B2R. We will be touching USD 35MM ARR in the coming days and looking to touch USD 150MM ARR by Apr’23. This will position Saveo as the category leader in the B2B pharma marketplace with 100k+ transacting pharmacies. We at Saveo are not only focusing on the sales growth but also on the way to make it a sustainable business along with profitability. Currently we are running at CM2 positive and expecting to reach CM3 level breakeven by Sep’22 and further EBITDA level positive by Q2 of FY ‘23-24.
