For its final round, the Silicon Valley startup NowRx decided to avoid the venture capital dollars.
The online pharmacy aims to raise $ 73 million in Series C funding through SeedInvest, an equity crowdfunding platform.
This isn’t NowRx’s first crowdfunding increase – it’s its fourth – as the company’s previous round, which raised $ 20 million, was oversubscribed and was SeedInvest’s largest increase in the era, according to NowRx executives.
When completed, the Series C cycle will bring the company’s total funding to over $ 100 million. Since the Series C opened to reservations, more than $ 8 million has already been pledged, the company said.
RELATED: NowRx and Medly Pharmacy Get New Funding As Demand For Digital Pharmacy Rises
The start-up, which provides same-day and same-time prescription drug and telehealth delivery services, aims to use the funds to expand into other territories and accelerate the technology roadmap for its software. pharmacy management and its proprietary logistics technology.
The increase follows strong growth, with the company recording $ 13.4 million in revenue in 2020 and continued momentum in the first half of 2021, the company said.
Entrepreneur Cary Breese launched NowRx in 2016 to reinvent the pharmacy experience. The company was built around the idea of ââeliminating traditional pharmacies and replacing them with a logistics-driven pharmacy distribution model. The company also operates micro-fulfillment centers and uses proprietary pharmacy software, robotics, AI, and last mile logistics to provide free same-day delivery of prescription drugs.
In the past 12 months, NowRx has grown from two to eight locations, supplying over 365,000 prescriptions to over 35,000 clients. NowRx aims to expand its same-day drugstore delivery services across the country, with plans to open micro-fulfillment centers in the top 20 metropolitan areas of the United States.
The company also launched NowRx Telehealth in March, targeting the $ 61 billion global telehealth market. The first phase of the service included the launch of NowPrEP, a specialist service that includes free physician assessment, lab tests and home delivery of pre-exposure prophylaxis (PrEP). NowRx plans to offer dozens of other specialist physicians and targeted conditions that would benefit from the convenience of home visits and prescription delivery.
Breese says equity crowdfunding has given NowRx a few key advantages over the traditional venture capital (VC) path.
Taking the non-traditional route of crowdfunding to raise funds allows the startup to manage its own strategy of technological development and growth without undue influence from large institutional venture capital funds while prioritizing the customer experience, a he wrote in a blog post.
âWhen a company receives an investment from a traditional VC, founders are under a ton of pressure to show their performance (growth) as quickly as possible. A bigger check usually means more pressure,â Breese wrote. . Often times, this causes founders to make decisions purely on the basis of growth. In other words, founders prioritize growth at all costs, even if it means sacrificing quality or customer experience.
The âbuild quickly and break thingsâ mentality that defines many Silicon Valley startups has no place in healthcare, Breese wrote.
âEquity crowdfunding has given NowRx the advantage of avoiding the ‘growth at any cost’ pressures that have become all too common in the venture capital world. It has allowed us to focus on scaling up. ‘enterprise scale in a more sustainable way,’ he said. .
Equity crowdfunding also sets fair conditions and valuations, according to Breese.
âThe overall process is just a lot more objective and less sensitive to hype or other external factors,â he wrote.
RELATED: Digital Pharmacy Startup Capsule Raises $ 300 Million to Invest in ‘One Stop Shop’ for Digital Health
The current pandemic has raised the bar for telehealth services and pharmacy delivery. Patients now expect speed, reliability, convenience and quality, Breese said.
In addition to its pharmacy management software, NowRx provides a consumer app for full transparency of the prescribing process and the âWheelzâ driver app that allows the business to coordinate pharmacy deliveries and transactions while allowing customers to track their prescriptions in real time using GPS.
The company’s growth comes as digital pharmacies have gained momentum – and investor support – in recent years.
One of the latest increases came from Capsule, which raised $ 300 million in April to support its digital pharmacy and accompanying services, including telemedicine and mental health support. Alto pharmacy too closed a $ 250 million Series D round in early 2020, while Medly Pharmacy and Now Rx grossed $ 100 million later in the summer.
Each of these players advance under the impending specter of Amazon Pharmacy.
The online retail giant bought out Pillpack in 2018, launched its prescription benefit service last year, and unveiled new price comparison features in May.