MedznMore raised $14 million to put authentic medicines on pharmacy shelves, then stopped in 2023
The Karachi startup claimed 42 percent growth a month and 10,000 pharmacies served. The arithmetic of that growth shows why a medicine distributor has so little room when the next round does not arrive.
In May 2022 MedznMore said it had grown about 42 percent a month for the previous 12 months. Compounded, that is 1.42 multiplied by itself twelve times, or roughly 67 times in a year. The same arithmetic has a second consequence. If every month is 42 percent larger than the one before, the latest month holds about 30 percent of the year's orders and the last three months about two thirds. Most of the volume is therefore new, and for a distributor new volume means stock bought and credit extended before any cash comes back. The Karachi healthtech startup stopped operations in early June 2023, its cofounder said, 13 months after that claim.
A supplier first, a pharmacy second
MedznMore was founded in 2020 by Asad Khan, a former general manager at Careem, Saad Khawar, who had been head of product at the online pharmacy Dawaai, and Babar Lakhani. On 18 October 2020 it announced a $2.6 million seed round, which it called the largest seed round raised by a Pakistani startup. The company described its backers only as big local families and international investors.
The first product was an online pharmacy in Karachi that promised delivery within four hours, using its own logistics rather than a third party courier. It bought from manufacturers or their authorised distributors, which the company said made every product authentic. It also sold wellness products and medical devices, and named Lahore, Islamabad, diagnostics, telehealth and insurance as the next steps.
By 2023 the business had two faces. The US Development Finance Corporation, which backs MedznMore through its $10 million equity commitment to Integra Partners Fund II, describes separate business to business and business to consumer platforms, both buying drugs directly from manufacturers. The consumer side was Tabiyat.pk. The business side served pharmacies.
Why the pharmacies mattered
The DFC account of the problem is direct. Many Pakistani pharmacies are unbanked and short of working capital, so they buy from grey market suppliers, which the corporation calls a major driver of the problem. It cites a survey finding that more than 40 percent of medicines sold in the country are substandard. MedznMore offered those shops software for sales forecasting and credit scoring, which the DFC says helped them reach formal financial services.
This is the magazine's reading of the model. A household buys medicine a few times a year, while a pharmacy reorders far more often, so the shop was always the better customer than the patient. Registered medicines in Pakistan also carry government set maximum retail prices, which means a distributor cannot win by charging more, and a delivery app cannot easily win by charging less. What is left to sell is reliability: stock that arrives on time, from a source the pharmacist trusts, on credit terms the pharmacist can live with. Order history is also the raw material for a credit score, which is why a supply platform and a lending product fit together.
The numbers, read closely
The $11.5 million round announced in May 2022 came from Integra Partners, Nunc Gestion, Sturgeon Capital and Alta Semper, with AlTouq Group, ACE and Company, Key Family Partners, Reflect Ventures, Atlas Asset Management and angels also taking part. Together with the seed, that is $14.1 million, which matches the company's own figure of more than $14 million. The release said the company controlled over 1 percent of Pakistan's pharmaceutical market and ran seven cold chain warehouses in Karachi, Lahore and Islamabad. Those are the company's claims, none audited, and it never published revenue.
The DFC page, written in 2023, gives other measures: eight warehouses, more than one million deliveries, more than 10,000 pharmacies and one million consumers served. The deliveries run from October 2020 to June 2023, about 32 months, so one million deliveries averages roughly 1,000 a day across both the pharmacy and consumer sides. With the growth pattern above, that average understates the final months and overstates the early ones, which is what a business still ramping up looks like. The published figures do not say how many of those deliveries went to pharmacies.
The 42 percent claim has a limit of its own. Growth from a small base is easy to achieve, and without a revenue figure the 67 times says little about how large the business had become. The gross margin on each order was never disclosed either.
The warehouse count offers one more check on the claims. MedznMore reported seven in May 2022 and the DFC counted eight in 2023, a single addition across the period in which the company also said its orders were multiplying. The sums fit either a business whose early warehouses had spare room or one whose growth slowed after the round. The published figures cannot say which.
What the closure shows
The shutdown became public on 14 July 2023, in a statement from Khawar. He said Pakistan's macroeconomic conditions had been nosediving over the past many months, which hurt because the company was in the middle of raising money. He said there was no major gap between assets and liabilities and that the company was clearing what remained.
The mechanics explain why a good run of orders does not rescue a distributor. Stock is typically bought from manufacturers and sold to pharmacies, often on longer terms. The gap between paying and being paid widens with every extra order, so faster growth needs more capital, not less. Such a business can earn a margin on each delivery and still depend on the next round to fund its stock. When that round stalls, it must choose between cutting its customers off and running out of cash.
“We are in talks with a few large players who are looking to buy our technology and brand, Tabiyat.pk.”
The outcome of that sale is not public, nor is the number of staff affected or how the pharmacies that relied on the company's credit and deliveries were served afterwards. The DFC page, profiled in 2023, still lists MEDZnMORE among the investments supported by Integra Partners Fund II.
