One of the three winners of last year’s Nigerian She Leads Africa Accelerator – part of the Work in Progress! project – is Medsaf, a startup run by Vivian Nwakah that focuses on solving supply chain issues for quality medicines. Today we connect with one of Medsaf’s investors and board members Yvonne Wassenaar (right side below, Vivian on the left) to find out why she decided to back the company.
Hello Yvonne, please tell us about yourself?
“I work to be a catalyst who inspires a shift in action and challenges leaders to embrace technology and diversity in order to stay relevant in a rapidly changing world. I am a long time student of how software and technology having spent over 17 years at Accenture in addition to my executive roles at VMware, New Relic and now Airware, where I am CEO. I am a member of the SHIFT Commission and I also sit on the Board of Directors for Forrester Research, Bitium, MedSaf, Harvey Mudd College, and the Athena Alliance.”
How did you get involved in supporting and investing in African startups and why?
“It is clear that technology is going to change the world around us and if we are thoughtful about it, that change will be for the better. While this is a true statement in mature markets such as the United States; it is even more true in developing markets in Africa. In November 2016 I had the opportunity to witness the disruptive potential of technology first hand when I joined the Tour of Tech run by Ingressive.
It was a fabulous opportunity to learn more about the challenges and opportunities in Africa, meet and engage in the African Angel community, and most importantly meet some of the brilliant and dedicated entrepreneurs who are focused on transforming the continent for the better.”
Vivian Nwanka on the left holding the cheque Medsaf received as one of the SLA Accelerator 2016 winners
How do you see yourself being able to add value?
“During my time in Nigeria; I met with over 100 entrepreneurs. I was deeply impressed by their vision, passion, and commitment to change the world around them. Two of the common themes that came up, however, is that many of them have little previous experience starting companies and very limited access to capital to help them along the way.
Having spent over two decades in Silicon Valley, both on the acquiring side of start-ups and as an advisor/board member to start-ups in the US, you can forget all that you have learned both from the successes and even more importantly the failures. The value I bring to the Medsaf is a combination of lessons learned from my own experience, access to my network of venture capitalist and angel investors in Silicon Valley along with my own ability to be able to invest in the company.”
Can you tell us a bit about Medsaf? What is this company about?
“Getting access to quality medication when you need it in Africa is anything but a given. There are significant medication supply chain issues and challenges in Nigeria but also across Africa. The chaos and leakages in the supply chain allow for the proliferation of fake and/or expired drugs, as well as sub-standard drugs, that put people’s lives at risk.
Hospitals, Pharmacies, and the general public are at risk because medication has not been tracked from the source and there is no way to delineate between fake, substandard and quality medications. There is also a lack of some life saving specialty medication that can only be acquired by flying to a developed market and bringing the medication in the country. Medsaf is focused on addressing these market challenges by providing an easy-to-use platform built for medical service providers in Africa (hospitals, pharmacies, and clinics) to purchase and manage medication.
Using leading edge technology, Medsaf solution eases the supply chain issue and delivers lower costs, increased operational efficiency and steady access of quality medication directly to hospitals and pharmacies. Early efforts have shown great traction both with Pharmacies and Hospitals as well as with the connections they are making with the drug manufacturers themselves.”
What do you see as their big opportunity?
“The initial opportunity is to leverage technology to provide transparency and trust in how medicine is distributed in Nigeria and over time more broadly in Africa. The next big growth opportunity is going to be the insight the company can bring to its partners and customers leveraging the data it collects over time. This will allow companies to be smarter about how they distribute medicines, it can allow for better sharing of medicines across the community of users, along with more efficiency and lower costs for all involved.”
What do you see as the critical challenges for the business moving forward?
“As with most start-ups; the biggest challenge is effectively prioritizing the work to be done and scaling the right activities at the right time. There will always be more that you want to do – what is important to figure out is what you must do right now. And to ensure you aren’t getting too busy in the day-to-day that you lose site of the big picture and changes that may occur in your market.”
How did you meet Vivian and the MedSaf team? How did this relationship develop?
“I still remember when I first met Vivian back in November. It was one of many entrepreneurial chats I was having at the café next to a big entrepreneurship conference, Vivian was at the event as part of the She Leads Africa accelerator program where Medsaf was selected as one of the winners.
As I sat and listened to her pitch – I was initially struck by the personal passion and connection she has to the mission she is driving. Then, as we got into it, I was deeply impressed by how thoughtfully she was pulling the business together. She wasn’t just another group of college friends with a good idea. She is a well-educated, highly articulate and thoughtful leader with a vision, a well rounded/seasoned team, and a well thought out plan to make it real.”
What happened for you to feel so convinced/compelled you decided to invest?
“What compelled me to invest is a combination of my desire to participate in the massive technology transformation in Africa, my alignment to the vision Vivian has created with MedSaf and my deep belief in Vivian as a leader. While it is important to have a compelling number story on paper; in my experience what really makes the difference between a successful entrepreneur and the many failures is the leader. Is this a person you believe can make a difference? Vivian most certainly can!”
Can you tell us about pulling the deal together? Valuation, approach, etc?
“There are two important components to think about how one values a company and puts together a deal. First, there is the mathematical approach that looks at market sizes, ability to capture, revenues to date and the like and determines a set of “reasonable” future cash flow potential that can be used to determine a company’s valuation and hence reasonable about of equity someone should get relative to their investment in a start-up.
The second, when you are looking at very early stage start-ups, is the vision and potential of the founders and their team. You must deeply believe the founders will be able to lead their teams through the various twists and turns down the road that no one can really foresee. A successful valuation is one where you end up with a compelling but realistic view of a company’s potential. If you are not aggressive enough in the potential you see – no one will want to invest in you and the company. However, if you are too aggressive, you risk overstating the value, under delivering and killing the chances for success over the longer term.”
How are things going? What has happened since? Any numbers/milestones you can present?
“Medsaf initially launched in January 2017 and ran a trial run to refine operations, finalize partnerships, analyse medication demands and category demands. Since there is no off the shelf technology solution, they had to test processes with hospitals and pharmacies, as well as internal processes and translate that in a technically sustainable way.
While they were in their trial they had over 200 hospitals and pharmacies sign up to use their services. Right off of their trial, they now service between 40-50 hospitals and pharmacies across Lagos and that number is growing daily. Their average customer order size is about $600 and they are growing and gaining more traction. They are currently at 85% customer retention. They’ve built the right manufacturer, logistics and financing partnerships to help them scale quickly across Nigeria.”
What is your relationship like with the company? How is this structured?
“My relationship with Vivian and MedSaf is that of a sponsor, mentor and advisor. My goal is to ask the hard questions that need to be asked, to share my experiences as input into how the team considers their own path forward, and to share my network so they can expand their own for the advancement of the company. Formally, I sit on the Board of Directors though my engagement takes place in both formal and informal connection points.”
What are the things that have to happen now? How can people help?
“The biggest way that Medsaf can be helped right now is with an injection of angel money from the right investors. They have been very strategic in who they have asked to invest in their company and this is all due to their visionary outlook on the potential of Medsaf. They have built the right team, now they need the right amount of money to keep the company growing and expanding.”
What is your message to others considering to get involved in African based startups?
“Now is the time to get involved and make a difference! As you go on this journey – take the time and understand what you are looking to get out of the experience and make your choices accordingly. There are lots of great resources who can help such as ABAN, VC4Africa and Ingressive.”
The She Leads Africa Accelerator is supported by the Work in Progress! Alliance. This initiative is focused on unlocking the economic potential of young women and men in Egypt, Nigeria and Somalia. The project aims to enable them to generate sustainable and living incomes – by finding regular employment or starting enterprises. Alliance partners include Oxfam, VC4A (Venture Capital for Africa) and Butterfly Works. As part of the project, VC4A partners with local accelerators and works to strengthen local investor networks.