PIC CAPTION: Ahmed Kadous, CEO and co-founder of Pharmacy Marts, Egypt's first managed B2B one-stop digital marketplace pitched for the first time at a 2022 AfricArena Summit, and won the AfricArena Best Seed Startup Award for the North African region. Since then, he and his team have gone on to raise over $2 million in funds to date for Pharmacy Marts which is revolutionising the way pharmacies in the MENA region do business through an innovative digital solution. Image: Supplied / AfricArena
While the global economy is showing signs of further slowing down for the third straight year, pointing toward an economic recession, Africa’s economic growth tells a different story as the continent’s economic growth is projected to outpace global growth. Within this context, Africa’s pharmaceutical market, currently worth $12.70 billion, is expected to reach a $50 billion market value by 2030. The MENA’s first managed B2B one-stop digital marketplace, Pharmacy Marts is riding this wave, revolutionizing the way pharmacies in the MENA region do business in the digital era. Ahmed Kadous, Pharmacy Marts co-founder and CEO, shares his startup’s big plans for the future with AfricArena’s Jabulile Sonya Ngwenya.
Energetic in his expressions, and deep in thought as he speaks, Kadous shares that Pharmacy Marts’ journey has been an interesting one so far since founding it in 2021 in the wake of the 2020 covid pandemic which upended many people’s lives.
“Pharmacy Marts is MENA's first managed B2B one-stop digital marketplace, including distributors, wholesalers and manufacturers, for all pharmacy needs. It saves 30% of time, provides fintech, both on and off the balance sheet, and logistics arms, including same-day delivery,” Kadous says.
Since its inception, this digital solution to many pharmacies’ growth headaches has experienced exponential success. Pharmacy Marts, Kadous says, “owes its remarkable success as Egypt's one-stop digital solution for all pharmacy-related needs, due to several key factors that simplifies, digitizes, and enhances the efficiency of the pharmaceutical supply chain by saving 30% of pharmacists’ time that was traditionally consumed in manual stock tracking and phone calls with suppliers to check product availability and prices, offering financing options that help improve the working capital for pharmacies, providing a same-day delivery ensuring that pharmacies receive their orders punctually. And we’re still working hard towards digitizing and upgrading the pharmaceutical supply chain.”
After a 12-year career in corporate, working for three major pharmaceutical companies, namely Pfizer, Novartis and Takeda, Kadous took the brave step out of that world into the world of entrepreneurship without knowing anything about startups. Even so, Kadous says his corporate experience equipped him to “effectively manage projects, handle teams, earn diversified connections and understand the market.”
Kadous and his co-founders saw an opportunity during the covid pandemic, analyzed it, quantified it and conducted market research to see if it was viable and scalable. “The covid pandemic was our defining moment when we realized there was a need for our solution as during the pandemic, when everyone was searching for a specific medication and couldn’t find it, this created a huge gap and a market that clearly needs to be digitized,” says Kadous.
Experiencing life during the covid pandemic “was a life changing experience for us all, yet it accelerated the adoption of tech products, which helped us a lot during the launch phase, as well as a huge global interest, even from investors on the importance of the healthcare space.”
It was not difficult for Kadous to find his co-founders, Haitham El-Ghotni, Ahmed Mazhar and Mahmoud Shousha who helped him to co-found Pharmacy Marts right from the word go. “We’ve been friends for more than 20 years, or we worked together for more than five years, and they are the right match due to their experience, as well as how we complimented each other,” Kadous chuckles.
It is not a coincidence that Kadous and his team founded Pharmacy Marts in Alexandria, Egypt’s second largest city. This city, named after a Macedonian king renowned for his military conquests, Alexander the Great, was in ancient days, a hub for medical knowledge and discoveries.
Recalling the early days of pioneering and building his startup, Kadous says, it was not easy at all, especially in an uncertain economic climate. “We bootstrapped for one year and then once we had good traction we started fundraising at that time, in early 2022, and it was much easier than nowadays.”
Pharmacy Marts’ founding team built this thriving startup with an initial fund of $100,000. These funds, Kadous says, “supported the company to build the MVP and have the first couple of customers during year one.”
Kadous, who says he is “passionate about solving problems, developing people, creating jobs and improving patients' access to medications” says that the early stages of building the MVP was hard work, but worthwhile. “We validated the market, spoke with different stakeholders, including suppliers, pharmacies and pharmaceutical companies to see if there was an appetite for our solution before going all in.”
Validation, he says, is such a critical part of building a MVP and no startup should skip this crucial step, no matter how time consuming it may be. “We had deep dive groups with pharmacies in order to get two things, validation on idea, validation on need and getting their insight before even developing any tech product,” Kadous says.
After a year of bootstrapping, Kadous says he and his team saw a need to raise funds to take their startup to new levels, and they applied to pitch at the AfricArena North Africa Summit in 2022 where Pharmacy Marts won the AfricArena Best Seed Startup Award for the North African region.
Startups, Kadous says, should never forget their first pitching opportunity, for the people who see you pitch for the first time will remember you in the years to come. “AfricArena holds a great space in our hearts, as it was our first award ever. Now we have more than 10 awards. The AfricArena award gave us a huge motivation, as well as connections to a huge pool of ecosystem players, investors, other startups and exposure to new markets,” says Kadous with a smile.
Kadous says it is important for AfricArena and like-minded organizations to “keep developing the African ecosystem” in such a way that edifies the lives of people who benefit from innovative, African-bred, African-led innovative technologies.
Raising funds, he says, is just the beginning of any startup’s journey as challenges do arise within the landscape. The biggest challenges Pharmacy Marts faced, says Kadous, happened within Egypt’s macroeconomic situation, rising costs and when global funds started to dry out, and the funding winter kicked in, slowing down investments. Given this, Pharmacy Marts switched gears from raising funds to a strategy which, Kadous says, “helped us to focus on reaching the breakeven point, optimize processes and create tech products that reduce operational costs, replacing high headcount.” In addition to this, Kadous reveals that they coped with the funding winter by “diversifying revenue streams, containing unit economics. pausing geographical expansions and focusing on the current geography.”
These strategies paid off as Pharmacy Marts has to date, raised $2 million in funds, with the latest tranche coming from Acasia Ventures. The funds raised, Kadous states, will help Pharmacy Marts to expand into new markets and develop new tech products.
Even while he and his team are in the midst of developing new tech products, Kadous says, the best advice a mentor gave him was to “focus on the customer rather than falling in love with the product.” This advice has stood the test of time and helped Kadous to stay grounded and focused on what matters most while building a multi-billion dollar business.
Building a thriving unicorn startup is not for the faint of heart. A typical day in Kadous’ life sees him spending most days at the Pharmacy Marts offices, participating in external meetings, and travelling to attend different events. Conscious of the importance of maintaining a healthy lifestyle, he incorporates time for gym into his daily schedule.
When it comes to raising new rounds of funding, he says, “we’re currently focusing on unit economics as a self-funded business. Afterwards, we plan to raise a big round to expand into other regions.”
The one thing, Kadous highlights, that has enabled Pharmacy Marts to grow to where it is now, is his remarkable team. “The team is the main factor in our successful expansion, as well as the funds and support from our investors.”
Passionate about the Arab way of doing business, Kadous says, Pharmacy Marts will expand operations to a new country within the MENA region, which will soon be announced. While sharing his expansion plans, Kadous says he envisions Pharmacy Marts scaling into the MENA region and to other African countries.
Kadous says what makes operating a startup within the MENA ecosystem different compared to the rest of Africa is that “the infrastructure, purchasing power, and tech acceptance are higher than the rest of Africa, while also benefiting from the advantage of a common language. Both macro and microeconomic situations, as well as the funding crunch, especially in North Africa, contribute to the challenges of being a MENA startup.”
Challenges do not intimidate Kadous, who has proven through his visionary leadership that big dreams do come true. He shares that his future plans include “diversifying the sectors, as well as being a key player connecting and reinforcing our mission of revolutionizing the pharmaceutical sector through Pharmacy Marts.”
E-commerce and digital marketplaces, Kadous notes, are transforming the way Africa does business in every sector. “It’s all about optimising the supply chain to be more effective and efficient, while customers get a better and easier shopping experience. Furthermore, the growth of fintech companies and startups significantly supports this sector, contributing to its overall success.”
Building an e-commerce business, he says, is not for the faint of heart for it requires stamina. Founders who want to voyage into the arduous territory of building e-commerce empires will do well to heed Kadous’ advice: “Start small, test market fit, focus on unit economics from day one, have a deep understanding of your expenses and be prepared as the journey is tough.”
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