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    HomeEcosystem NewsLatest FundingGhanaian Healthtech Startup mPharma Raises New $13.6 Million Following Workforce Reductions

    Ghanaian Healthtech Startup mPharma Raises New $13.6 Million Following Workforce Reductions

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     mPharma, a pioneering healthtech company based in Accra, has successfully raised $13.6 million from investors, including the Sanofi Global Health Unit (GHU) Impact Fund, according to information obtained by Launch Base Africa. This recent funding round, concluded in January, comes on the heels of significant layoffs at the company. 

    Founded in 2013 by Gregory Rockson, Daniel Shoukimas, and James Finucane, mPharma has consistently focused on improving prescription drug management for pharmacies, optimizing retail pharmacy operations, and providing essential market intelligence to hospitals, pharmacies, and patients. The company has expanded its services to include telehealth and e-commerce, aiming to transform community pharmacies into comprehensive health service providers.

    In 2022, mPharma secured $35 million in a Series D funding round, which was intended to enhance the company’s data infrastructure, expand its workforce, and support its growth in both existing and new markets. “We are hiring over 100 engineers to build all our technology in-house and this includes a massive data infrastructure we are creating. We are also investing in other skilled talent like doctors and nurses, professionals that are critical in the work we do,” CEO Gregory Rockson told TechCrunch at the time. 

    This funding included $30 million in equity and $5 million in debt from Citibank, raising the company’s total capital to $65 million. Notable investors in this round included JAM Fund, Unbound, Lux Capital, Northstar, Social Capital, Novastar, and TO Ventures.

    Expansion and Technological Integration

    mPharma has been ambitious in its expansion and technological integration. The company’s flagship pharmacy management software, Bloom, is designed to create structured health data sets, improving care delivery through its Mutti pharmacies. The company operates in multiple African countries, including Ghana, Nigeria, Kenya, Zambia, Malawi, Rwanda, Ethiopia, and Gabon.

    The telehealth services introduced in 2022 aim to establish 100 virtual centers, enhancing healthcare accessibility. This initiative aligns with the company’s broader strategy to increase its community pharmacy network tenfold over the next three years. Patients across these regions now benefit from mPharma’s telemedicine services, which provide critical health consultations remotely.

    Economic Challenges and Workforce Reductions

    Despite its growth and innovation, mPharma has not been immune to the economic turbulence affecting the African startup ecosystem. In September 2023, the company announced the layoff of 150 employees. This decision, according to Rockson, was driven by macroeconomic conditions, particularly the devaluation of the Nigerian Naira.

    Rockson highlighted the necessity of these layoffs to ensure the company could continue serving its patient base effectively. “We have allowed affected employees to retain their health insurance, and we have extended the period during which they can exercise their stock options from 90 days to 3 years,” Rockson stated, emphasizing the company’s commitment to its workforce despite the cutbacks.

    Broader Startup Ecosystem Impact

    mPharma’s challenges are indicative of wider trends in the African startup ecosystem. According to a recent report, funding for African startups in the first quarter of 2024 fell by over 45%, totaling $466 million.

    Despite the downturn, logistics startups were the top performers, securing $151 million in investments. Fintech, although experiencing a decline, continued to have the highest number of funding deals.

    In response to funding constraints, many startups adopted strategic measures to stay operational. These included workforce reductions, shifting business models, and exploring asset-light strategies.

    Amid these challenges, mPharma remains dedicated to its mission of improving healthcare access across Africa. The company’s innovative strategies and resilience are key as it navigates the economic landscape, striving to expand its services and maintain its commitment to quality healthcare.

    The healthtech sector, with its potential to bridge significant gaps in healthcare provision across Africa, remains a critical area for investment and development. mPharma’s ongoing efforts to innovate and expand its services illustrate the potential for growth and improvement in healthcare delivery, even amid economic headwinds.

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