Ailaaj, Pakistan’s first full-stack digital healthcare platform, announced Wednesday that it has raised $1.6 million in a seed round.
The financing was led by JS Group, Pakistan’s largest financial services conglomerate, with participation from other investors including the Lahore-based Fazal Din Group, Leonine Tech Ventures, and East Asian private equity investors.
Ailaaj was formed through the acquisition of AugmentCare, a 2017 telehealth startup, and Sehat.com.pk, a 2014 online pharmacy. Augmentcare had previously raised approximately $1 million in its early stages.
With a population of 221 million, Pakistan currently has one doctor for every 1,300 citizens, ranking 115th globally, while the government spends only 1.2 percent of GDP on healthcare. Needless to say, Pakistan’s current healthcare ecosystem is fragmented, with a plethora of disparate service providers frequently resulting in gaps in patient care.
As a full-stack healthcare company, Ailaaj says it will close those gaps through its vertically integrated primary care platform, which will power a personalized, end-to-end healthcare experience encompassing everything from diagnosis by Pakistan Medical and Dental Council (PMDC)-certified doctors to medication delivery, corporate health and wellness, and ongoing care.
“It’s a comprehensive, 360-degree platform for any patient at any stage of their disease continuum and throughout their patient journey. It is patient-centered, and we alleviate your burdens. You are not required to bring your laboratory tests or reports with you. Everything is centralized; all you have to do is pick up the phone; the rest will be taken care of,” Hyder Mumtaz, founder, and CEO of Ailaaj, explained to Profit.
“Your medications will be taken care of; your pharmacist will assist you in understanding your prescription, determining any adverse drug reactions, and answering any questions you may have. It’s a whole new level of healthcare that will occur to simplify a patient’s life through this platform,” he adds.
“Sehat and Augmentcare benefited from prior synergies in that they were positioned as well-known healthcare startups (epharmacy and telemedicine, respectively) in Pakistan’s burgeoning ecosystem,” says Bilal Mumtaz, head of ecosystem/partnerships and co-founder Ailaaj.
“Pakistan’s e-pharmacy industry has been steadily growing since the initial Covid wave. We saw a significant increase in the regulation of personal protective equipment, which was not previously the case. Numerous traditional businesses entered healthcare at this time to fill market gaps and diversify their product offerings. At the moment, the merger is both strategic and tactical. Ailaaj will continue to grow its business, clientele, and market recognition in the years ahead, leveraging technology to make healthcare management easier for its growing user base,” Mumtaz added.
Ailaaj was founded by professionals with years of experience in health care delivery and medical practice. Both startups were incubated by the Fazaldin Group, which is best known for its retail pharmacy chain Fazal Din and Sons and has been a pioneer in Pakistan’s healthcare sector for over 70 years.
The Group has extensive experience in medicine procurement, supply chain management, distribution, and sales, and, as a result of its presence in the sector since the 1940s, also understands the operations of various subsectors such as insurance. The Fazal Din Group, now in its fourth generation, is continuing the family tradition of modernizing the country’s healthcare services by advancing the currently siloed digital healthcare sector in Pakistan by establishing Ailaaj as a full-stack digital healthcare platform.
Today, Ailaaj says it is entering the Pakistani pharmaceutical sector, which is estimated to be worth $4 billion. According to data from the Pakistan Bureau of Statistics (PBS), healthcare spending in Pakistan has continued to rise over the last decade and a half on a per-capita basis.
According to PBS data, average monthly healthcare spending in Pakistan has increased from Rs56 per person in 2002 to Rs335 per person in 2018, an average annual growth rate of 11.8 percent.
“The natural progression will be to leverage key opinion leaders in the baby and beauty sectors through social commerce,” the company stated in a statement. “Pharmaceuticals, cosmetics, and baby products, as well as physician consultations and laboratory testing, represent a roughly $20 billion market,” it added.
“With Ailaaj, we partner with a brand owned by the Fazal Din brothers that is focused on disrupting their legacy business through cross-generational learning and foreign education, resulting in a highly formidable team,” Salaal Hasan, director venture capital at JS Group, explained.
“With a PC-2 positive eCommerce business model and strong unit economics in B2B telemedicine, Ailaaj is well-positioned for accelerated growth in a post-Covid Pakistan, where the doctor-patient ratio and government spending on healthcare remains extremely low,” he added.
Following the acquisition and financing, the company intends to expand its product offering and introduce a diverse range of products and services to assist patients in obtaining an overall healthcare experience. According to the CEO, the funds will be used for marketing, technology stack development, and team expansion.
While the rebranded entity aims to provide an unmatched healthcare experience in a digital environment, it bodes well for the startup ecosystem in particular. It’s always encouraging to learn that two startups in a sector providing distinct patient services have scaled to become a single entity. While this may speak to the health technology sector’s growth prospects, it also establishes a precedent for other startups to follow a similar path in order to accelerate growth.
Marham.pk, Ailaaj’s competitor in the health tech space, recently announced a $1 million funding round. Sehat Kahani and Dawaai.pk previously announced that they had raised $1.5 million and $8.5 million, respectively, for their startups.