Nigeria-based healthtech startup, Lifestores, has secured $3 million in a new funding round. This is coming on the heels of an earlier disclosed seed round of $1 million in 2020.

With participation from Aruwa Capital Management and other investors, Health54 led the second, oversubscribed round.

Bryan Mezue and Andrew Garza, who started the company, knew that anything they made had to make high-quality, low-cost basic health care more accessible to everyone.

This was because they had previously worked on supply-chain and pharmaceutical-related projects. In 2017, they introduced Lifestores Healthcare, a chain of retail pharmacies that uses technology to offer a variety of services. Lifestores consist of two B2B components.

The OGApharmacy B2B marketplace comes first. It was put in place in 2020 during the pandemic and makes it easier for pharmacies and hospitals to buy what they need.

Then, Lifestores talks with suppliers to get the best deals on high-quality drugs, getting discounts of 10 to 20%. The other is an ERP system that may be used to manage operations by pharmacies and dispensaries.

Lifestores Healthcare has a network of more than 750 places where its services are available. The health-tech firm claims a 25% monthly market growth and more than 10% of Nigerian pharmacies as registered clients.

It hopes to boost its market share to 25% by 2023, which will result in a 4x expansion in patients reached, from 100,000 to 400,000.

Lifestores will add new technology to its B2B services, according to a statement. This will include pharmacy management software, AI-driven predictive ordering, innovative credit services, and patient management projects. To support this growth, Lifestores will also open a new processing centre in Lagos.

Lifestores will also expand its B2C services by trying out projects in patient savings, care management, and drug distribution.

In Africa's healthcare space, Lifestores and other startups that digitise the distribution network and distribution to suppliers have grown the most and reached scale the fastest in the last year. However, telemedicine is still the most popular healthcare provider in the world since the pandemic.

“Players frequently work on numerous geographies and perhaps multiple segments." The CEO outlined how Lifestores varies in its approach to business expansion by saying, “But we’ve taken a bit of a different perspective, where we’re getting very deep. We’re saturating certain locations before expanding to other ones because the market is fractured,” the company said.

READ ALSO - Proptech Startup PropSource Secures Undisclosed Funding

The founders also discussed some lessons learned from running their business for the previous five years, such as the significance of forming alliances with regulators, hospitals, dispensaries, and pharmacists, the fact that pharmacists are using technology more frequently than people realize, and how healthcare providers are worried about transparency regarding the quality and cost of medications.

Health54’s first investment on the continent is Lifestores’ seed round. The new company is CFAO Group's corporate venture capital (CVC) vehicle. CFAO Group is a subsidiary of Toyota Tsusho and owns the largest healthcare distribution network in sub-Saharan Africa.

If Lifestores Healthcare decides to grow in other parts of Africa in the future, it will be able to use Health54's growing network of healthcare providers as well as CFAO Healthcare's current wholesale distribution capabilities in Nigeria and the rest of Africa.

But for now, the health technology company wants to help Nigeria grow, improve its software, target new types of customers, and hire more people for its senior management, sales, and engineering teams.