Imagine a platform where you can upload a scanned prescription for medicines and pharmacies bid for the order and in the process, the final customer receives the maximum discount. The idea of launching a Pune-based startup would have been different had the online pharmacy business been successful a few years back. However, the startup struggled to scale up on the B2C model and had to turn to the B2B model of efficiently managing the health supply chain. Founded by Talha Sheikh and Ashok Yadav in November 2016, Biddano is an intra-city logistics platform that provides stockists, distributors and pharmacies in 53 cities across the country. Startup is empowering these partners in the healthcare ecosystem by offering supply chain finance services and the e-commerce market.
In the beginning…
Sheikh comes from a health background with her family business that runs specialty hospitals and diagnostic centers. He is an engineering graduate from Pune’s Sinhagad Institute of Technology and worked at some IT companies before trying entrepreneurship. Sheikh started his own tech service company, which he sold in 2016. Having experience in the domain of fintech and healthcare, Sheikh wanted to make his second startup in the healthcare technology industry when he met his co-founder, Ashok Yadav. Startup event in Pune. Ashok hails from more than two decades of financial leadership, operations and investment banking background.
Sheikh said, “I understand the inadequacies in the overall health supply chain management, including lack of technology, primary care, secondary patient care, hospital systems management. As we started to talk about these issues, I felt from our complementary skills that we could build something to make the healthcare ecosystem more efficient.
Yadav said, “When I resumed my job, I was working full time at Sheikh’s fall. We agreed that they would run the company until we could raise money.
Prior to arriving on the scene, leading online pharmacy players were trying to solve the drug’s affordability problem without disrupting the ecosystem. In this business-to-consumer model, the patient scans the prescription and uploads it on the platform. The dispensaries can then ‘bid’ for the order and offer discounted prices directly to the end customer.
Sharing their learning, Sheikh said, “Digitizing the entire healthcare ecosystem was a difficult task. Pharmacists, stockists and health care providers are always very traditional in their approach. Their propensity to embrace the digital technology platform has always been minimal. He was skeptical of working with technology startups for fear of losing business.
“Customers want better convenience, convenience and price advantages over local pharmacies. Today, anyone ordering through e-pharmacies has to wait at least 24 hours to deliver their medication. We shorten delivery times from 24 hours to 35 minutes. We didn’t know the behavior would change, we were ahead of time, we expected what would happen, but the retailers we were working with didn’t know that.
Despite the inertia, Biddano managed to gain traction and onboard at about 500 pharmacies in Pune. This B2C model continued until 2018 after Sheikh and Yadav decided to pivot.
Yadav says, “As a startup founder and entrepreneur, you always have your eyes and ears open. We have identified other opportunities. We realize that retailers, both offline and online, are struggling to provide customers with timely services and products. The root cause of this problem is the way the B2B health supply chain operates. From a business perspective, it makes sense to us because no players or technology companies are focused on organizing this market. We already have a technology platform that connects pharmacies, stockists and dealers with our own hyperlocal logistics network. We know the ecosystem and so we decided to pivot and provide logistics services to stockists and pharmacies.
In the offline world, every time you step into a pharmacy and a prescription drug or other product is unavailable, the pharmacist will ask the customer to arrive at the end of the day and deliver the product. What happens in the backend is interesting.
Explaining this further, Sheikh says, “Every pharmacy buys products from 10 to 20 different dealers or stockists. These stockists rely on their local delivery boys or courier services. But they have no technology, tracking, coordination or reliable solution available. So the time it took to deliver drugs from Stockist in Sadashiva to pharmacy in suburbs like Hadapsar was more than 12 hours. We thought there must be a better solution.
“Every city has its own ‘Dawa Bazaar’, where all the stockists are located and they supply all the products to the in-house pharmacies. Due to inefficiency, the cost of the pharmacy and in turn the end consumer will increase, ”said Sheikh.
Sheikh and Yadav realized that the market gap could be solved with the platform. Then they turned their business model around.
Yadav says, “The B2B healthcare market was more difficult than B2C because the mood of stockists, dealers, pharmacies and brands was very different. It took us a while to understand the nuances of the industry, such as moving the product within specific parameters, temperature control products, ice packs, insulin injection, hospital supplies. Chemist Association Pune District (CAPD) was one of our early supporters. We started with Sadashiva Pate, a surgeon and general stockist called ‘Krishna Agency’. Their main supplies are for hospitals, but they gave us access to this B2B market.
Sheikh said, “It took us 10 to 15 visits to get a stockist onboard and get the first 10 orders. Since this is a close community we have onboarded other stockists with referrals. Although our customer acquisition costs are very low, we still have significant burnout as we have to adjust the prices and advertising of local courier companies operating in this ecosystem. Managing business at the corporate level with local costs is tough. We had to close that gap and now we are very close to it.
Biddano is now revolutionizing offline pharma distribution networks by bridging the supply-chain gap between distributors and chemists through technology.
The ‘Healthcare Logistics Platform’ is the first product launched by Yadav and Sheikh at the end of 2018. They found a product-market fit in six months. After rising from the Pune market to the Pimpri-Chinchwad market, the founding duo began contacting investors.
Sharing his investor experience, Yadav said, “We initially bootstrapped for two years and raised our own money. We both had no network in terms of start-ups and no investor knowledge. All we have is faith in business. We knew this was a scalable business. I used to send LinkedIn requests while I worked in the office. I have connected with the people, introduced them to the basics and handed over the leadership to the Sheikh. He would meet them later. The first person to cheer us up was Sachin Oswal, a former cofounder and angel investor at Infibim. We set up a meeting and he blew us left, right and center. He was testing our patience and level of faith. The next day he sat in the office for two hours and helped us prepare a PowerPoint presentation and business model. He introduced us to the first investor, Dr. Ashwin Nayak, the country’s leading health influencer, and former co-founder of Serenity.
“We met Nayak in Aundh. Sheikh opened his laptop, but Nayak told him to shut down the laptop. After chatting with him for two hours, without seeing PPT or anything, Ashwin offered us ₹25 lakhs. They were the first to believe in us, ”Ashok recalled.
According to Sheikh, “You can change consumer behavior when it comes to buying products online, but you can’t change or influence decisions about what products they want to consume. No matter how much information you put on a website, consumers will not buy it unless the doctor recommends a specific product. The Indian mood and market is as follows. We understand this thought process and plan to leverage the existing 1 million pharmacies and stockists’ network and build technology solutions to make systems more efficient. With efficiency comes benefits, cost savings and other benefits.
Plans for the future
Revealing their future plans, Yadav said, “We are launching our own SaaS ERP, which ensures that every pharmacy and distributor in the pharma business is using the same platform across the country. This helps to reduce the wastage of drugs. Three per cent of wastage today costs us around ₹3,000 crore. ”