LAHORE: Ailaaj, Pakistan’s first full-stack digital healthcare platform which is offering end-to-end patient care services, Wednesday announced raising $1.6 million in its seed round.
The funding was led by JS Group, Pakistan’s prominent financial services conglomerate, with participation from other investors including Lahore-based Fazal Din Group, Leonine Tech Ventures, and private equity investors from East Asia.
Ailaaj was formed by the acquisition of telehealth startup AugmentCare which was founded in 2017, and Sehat.com.pk, an online pharmacy founded in 2014. Augmentcare had earlier raised roughly $1 million during its early days.
With a population of 221 million, Pakistan currently has one doctor to every 1,300 Pakistanis, ranking 115 globally while a meager 1.2 per cent of the GDP is spent on healthcare by the government. Needless to say that Pakistan’s current healthcare ecosystem is fragmented with numerous different service providers that often leave gaps in patient care.
As a full-stack healthcare company now, Ailaaj says it will bridge those gaps with its vertically integrated primary care platform powering a personalized, end-to-end healthcare experience from diagnosis by Pakistan Medical and Dental Council (PMDC) qualified doctors, to delivery of medication, corporate health, and wellness, to ongoing care into one seamless offering.
“It’s a holistic, 360-degree platform for any patient in their disease continuum and also the patient journey. It’s patient-centric and we take your burdens off of you. You don’t need to be taking your lab tests or reports with you. Everything is centralized, all you need to do is pick up the phone, everything else is going to be taken care of,” Hyder Mumtaz, founder, and CEO of Ailaaj told Profit.
“Your medications are going to be taken care of, your pharmacist is going to help you understand your prescription, figure out any drug reactions, or if you have any questions. It’s a whole level of healthcare that will happen to make a patient’s life easy that will be offered with this platform,” he adds.
“Sehat and Augmentcare had clear synergies from before by being positioned as well reputed healthcare startups (epharmacy and telemedicine, respectively) in Pakistan’s burgeoning ecosystem,” says Bilal Mumtaz, head of ecosystem/partnerships and co-founder Ailaaj.
“The e-pharmacy industry of Pakistan is steadily growing ever since the first Covid wave. We saw a lot of PPE equipment become regulated which wasn’t really the case before. A lot of traditional businesses at this time also made their way into healthcare to fulfill market gaps and to expand their product offering. At this current juncture, the merger is a strategic and tactical one. Ailaaj carries on with its existing business, clientele, and market recognition moving forward and will leverage technology to make managing healthcare easier for its growing user base for the years to come,” added Mumtaz.
Ailaaj is built by professionals who have dedicated years to health care delivery and the practice of medicine. Both startups were incubated by the Fazaldin Group which owns the very well-known Fazal Din and Sons retail pharmacy chain and is a pioneer in Pakistan’s healthcare sector for over 70 years.
The Group has deep experience in medicine procurement, supply chain, distribution, and selling, and by virtue of its presence in the sector since the 1940s, also knows how various sub-sectors like insurance operate. The Fazal Din Group, now in its fourth generation, is carrying on the family tradition of modernizing the country’s healthcare services by advancing the digital healthcare sector currently operating in silos by building Ailaaj as a full-stack digital healthcare platform in Pakistan.
“Sehat and Augmentcare had clear synergies from before by being positioned as well reputed healthcare startups (epharmacy and telemedicine, respectively) in Pakistan’s burgeoning ecosystem,” said Bilal Mumtaz, head of ecosystem/partnerships and Co-Founder.
“The e-pharmacy industry of Pakistan is steadily growing ever since the 1st Covid Wave. We saw a lot of PPE equipment become regulated which wasn’t really the case before. A lot of traditional businesses at this time also made their way in to healthcare to fulfill market gaps and to expand their product offering. At this current juncture the merger is a strategic and tactical one. Ailaaj carries on with it existing business, clientele, and market recognition moving forward, and will leverage technology to make managing healthcare easier for its growing user base for the years to come,” he added.
Today, addressing medicine, Ailaaj says it is tapping into Pakistan’s estimated $4 billion pharmaceutical sector. According to data from the Pakistan Bureau of Statistics (PBS), on a per citizen per month basis, healthcare spending in Pakistan has continued to rise over the past decade and a half.
According to PBS data, average Pakistani spending on healthcare has surged from Rs56 per person per month in 2002 to Rs335 per person per month in 2018, averaging a growth rate of 11.8% per year.
“The natural progression will be to leverage key opinion leaders through social commerce to expand into the baby and beauty sectors,” a statement from the company read. “Pharmaceuticals, beauty and baby products along with doctor consultations and lab testing is approximately a $20 billion market,” it added.
“In Ailaaj, we partner with a brand of the Fazal Din brothers looking to disrupt their legacy business, geared with cross-generational learnings and foreign education, forming a highly formidable team,” said Salaal Hasan, director venture capital at JS Group.
“Being PC-2 positive on eCommerce coupled with strong unit economics on B2B telemedicine, Ailaaj is well-positioned for accelerated growth in a post-Covid Pakistan, where the doctor to patient ratio and government spend on healthcare remain very low,” he added.
After the acquisition and the raise, the company plans to double down on its product offering and introduce a wide range of products and services to help patients get an all-around healthcare experience. The CEO says that the funds will be spent on marketing, developing the technology stack, and team growth.
While the rebranded entity hopes to provide a matchless healthcare experience in a digital setting, it particularly augurs well for the startup ecosystem. It is always good news that two startups in a sector providing different services for patients, scaled enough to become a single entity. While this potentially speaks of the growth prospects in the health tech sector, importantly, it sets precedent for other startups to explore a similar path that can help accelerate growth.
In the health tech category, Ailaaj’s competitor Marham.pk recently announced raising $1 million in recent funding. Earlier, startups Sehat Kahani and Dawaai.pk said that their startups had raised $1.5 million and $8.5 million respectively.