Pharmacy B2B marketplace Directo doses up on $2 million raise

B2B marketplace Directo, which streamlines logistics, invoicing and fulfilment for pharmacies and suppliers, has raised $2 million in fresh capital.

The round was backed by industry leaders and existing shareholders, including former President of Pharmacy Guild of Australia (NSW) Paul Sinclair, current President of the International Pharmaceutical Federation, David Vaux and Leon Steinkoler.

The company founded by Gavin Upiter in 2017, is seeking up to $3 million at $3.26 per share on a $25 million pre-money valuation.

Directo is used by more than 3,000 pharmacy retailers, up 500% on two years ago, enabling them to directly order from a database of over 200 suppliers and wholesalers, spanning around 45,000 products.

The fresh funds will be used to expand Directo’s supplier and pharmacy user base and develop additional value-added services and revenue generating initiatives. 

Upiter said they plan to open up investment to new backers shortly, including the development of an investment incentive programme for pharmacy group customers and other platform users.

“The strong support from existing investors, including pharmacy owners, in this capital raise is an endorsement of  Directo and places our company in a strong position to accelerate the growth of the business,” Upiter said.

“Our platform is transforming the Australian pharmacy wholesale supply chain, a $20 billion annual market, by  digitising the pharmacy-to-supplier journey. With the additional funds raised, we are well placed to onboard more  pharmacies and suppliers and integrate additional AI-driven solutions into our platform. 

“We will continue to assist retail pharmacies and their suppliers reduce administrative efforts, improve cash flow  management, and streamline processes through electronic invoicing, consolidating credits, payments and the management of supply and invoicing queries.” 

In the last financial year, Directo saw gross merchandise value (GMV) increase by 70%, active pharmacy customers grow by 57% alongside a 40% rise in suppliers and 21% growth in product listings.

Upiter said revenues have doubled annually over the past two years.

“We are now running at $40  million annualised revenue and have onboarded over half the nation’s pharmacies,” he said.

“We finished the June 2024  quarter with record trading results, which continued into the new financial year with a record monthly performance  in July, reinforcing our strong market position.”