Directo is set to scale the first online B2B marketplace for the pharmacy sector in Australia through a $2.3m capital injection from technology investors including Investible.
How does Directo’s B2B marketplace work?
The networked two-sided online marketplace is built on Directo’s proprietary enterprise tech platform that is configured for, and integrates into, pharmacy enterprise solutions. It transforms the management and interactions of the supply chain for over 500 pharmacies by connecting them with more than 80 suppliers and wholesalers on about 30,000 products.
Gavin Upiter, founder of Directo and creator of the platform said, “The Australian pharmacy wholesale supply chain is a $20bn annual market, so we see this platform growing exponentially over the next few years. The $2.3m investment from key technology investors and Investible will upgrade the platform to ensure it can scale to manage this growth.”
“This includes more AI and other value-added services for both buyers and sellers.”
Daniel Veytsblit, Investment Director at Investible said, “We have followed Directo’s journey over two years, and are excited to be partnering with them for the next phase of growth.”
“It is clear that Directo solves a pain point for suppliers, wholesalers and pharmacies. The platform can become integral, bringing big efficiencies and opportunities to all stakeholders.”
Why does the industry need Directo’s technology?
The 6,800-strong pharmacy sector in Australia is fragmented with many owner-operators, small groups, franchise networks and suppliers. An average pharmacy can have 50 direct suppliers over and-above those that are available from the main pharmacy wholesalers.
This complexity of supply channels means the sector has been left behind when it comes to refining the back-end ordering, stock management and distribution of products.
The key to Directo’s success is in the platform’s ability to add value for all participants, reducing costs in the supply chain, improving efficiency, providing price transparency and simplifying interactions between suppliers and pharmacies. The platform integrates with all buyer POS as well as seller’s systems making it easy for participants to get onboard.
Mr Upiter added, “The pharmacy sector in Australia had additional challenges in its supply chain compared to other sectors. These include little corporate ownership, different buying groups and compliance levels, rebates structures and government subsidies.”
“Our growth path has accelerated recently as we have worked hard over the last few years to build relationships with pharmacy groups and are now seeing ‘flywheel effects’ resulting in organic customer acquisition. An increasing number of pharmacies who see the benefits of being involved are now encouraging suppliers that they buy from.”
“These suppliers, after they experience the advantages it brings, are now encouraging other pharmacies they service to join the Directo platform to unlock supply chain efficiencies.”
“5 in 10 largest private B2B marketplaces in the US have the same business model as Directo – the targeting of retailers as buyers with a range of supplies such as wholesalers. The business model has been proven in several other markets. We have added our sector specific expertise to ensure we address the challenges of the pharmacy sector in Australia.”
