Digital pharmacy startups taking on industry giants CVS and Walgreens are securing sizable sums of money from investors.
New York City-based Medly Pharmacy scored a $100 million series B funding round co-led by growth equity firm Volition Capital and venture capital firm Greycroft with participation of Horsley Bridge and Lerer Hippeau.
Founded in 2017, Medly touts itself as a full-service pharmacy that provides on-demand, same-day prescription delivery and also validates and files insurance claims and works directly with patients to manage adherence to medication and refills.
Medly currently works with five pharmacies across New York, New Jersey, Pennsylvania, Maryland and Miami. With the investment, the company plans to expand to most major metropolitan cities in the next 18 months and will continue to invest in its technology, according to Chirag Kulkarni, Medly co-founder and chief marketing officer.
Since its inception, Medly has grown 100 times in revenue, added 15,000 providers and 50,000 patients, and delivered over 500,000 prescriptions.
Medly is far from the only digital pharmacy trying to to crack the $500 billion U.S. drug prescription market.
Silicon Valley startup NowRx announced it has raised $20 million in a new round of funding. The round, which was raised by crowdfunding platform SeedInvest.com, brings the company’s total funding to $30 million, according to NowRx.
Entrepreneur Cary Breese launched startup NowRx four years ago to reinvent the pharmacy experience.
"I had gone to the doctor with a sore knee and my doctor wrote out a paper prescription. I had to drive from the doctor's office to the pharmacy across town. I had to stand in three different lines, one to drop it off, another to pay and a third line to talk to the pharmacist. And I thought, 'why is pharmacy this way?' It seems like a broken model," Breese, co-founder and CEO of NowRx, told Fierce Healthcare.
NowRx provides free, same-day, door-to-door prescription medication delivery to customers. It operates four fulfillment centers in California and is opening one in Arizona.
The company will use the funds to improve its proprietary pharmacy management software and logistics technology and open more fulfilment centers to serve customers in additional territories, NowRx said.
NowRx also plans to expand into telehealth to target specific disease states, Breese said.
Taking on pharmacy giants
Traditional drug store chains are feeling the pressure from new digital players.
Alto Pharmacy snagged a $250 million investment led by SoftBank’s second Vision Fund along with existing investors GreenOaks Capital, Jackson Square Ventures, Olive Tree Capital and Zola Global.
Alto has raised over $350 million. The latest funding round vaulted Alto Pharmacy’s valuation over the $1 billion unicorn mark.
Truepill raised $25 million last week and has plans to expand into telehealth with a service that will connect 9,000 U.S. physicians with patients through real-time video.
In September, Capsule scored $200 million in its latest funding round and plans to expand its same-day prescription delivery services nationwide.
Amazon also got into the game with its 2018 acquisition of online pharmacy Pillpack. International trademark filings suggest Amazon will eventually take its pharmacy business global.
Consumers want a faster, more convenient way to get their prescription medications, and the COVID-19 pandemic has accelerated demand for delivery due to safety concerns, Breese said.
But, to fix pharmacy, "you have to do more than just add delivery," he said.
"The reason for the long lines in a pharmacy is because they are using 30-year-old technology to process prescriptions," he said.
NowRx has "re-engineered" the way prescriptions are filled and delivered using software automation, logistics, robotics and a micro-fulfillment strategy, according to Breese.
The company's pharmacy software, QuickFill, makes the prescription fulfillment process more efficient, according to Breese. For example, end-to-end robotic dispensing means robots sort, count, bottle and label medications in less than 30 seconds. The software also streamlines the insurance approval process.
Through a mobile app, consumers can schedule and track deliveries made by NowRx's drivers.
In the last year, NowRx has grown its new customer base by 84% and increased revenues by 78%. The company has delivered over 200,000 prescriptions to more than 28,000 customers.