PUNE Imagine a platform where you can upload a scanned prescription of medicines and pharmacies will bid for the order and in the process, the end customers get the maximum discount. Launched by Pune-based startup Biddano, if this idea had succeeded a few years before, the online pharmacy business would have been quite different. However, the startup struggled to scale up in the B2C model and had to pivot to a B2B model of efficiently managing the healthcare supply chain. Founded by Talha Shaikh and Ashok Yadav in November 2016, Biddano is an intra-city logistics platform servicing stockists, distributors and pharmacies across 53 cities in the country. The startup is also empowering these stakeholders in the healthcare ecosystem by offering them supply chain finance services and an e-commerce marketplace.
In the beginning…
Shaikh comes from a healthcare background with his family business of running speciality hospitals and diagnostic centres. He is an engineering graduate from Sinhagad Institute of Technology in Pune and worked in a few IT companies before trying his hands at entrepreneurship. Shaikh started his own tech service company which he sold in 2016. Equipped with experience in fintech as well as the healthcare domain, Shaikh was looking to do his second startup in the health-tech space when he met his co-founder Ashok Yadav at a startup event in Pune. Ashok comes from a finance leadership, operations and investment banking background with more than two decades of experience.
Shaikh said, “I understood inefficiencies in the overall healthcare supply chain management, including lack of technology penetration, primary patient care, secondary patient care, hospital systems management, etc. When we started talking about these issues, I felt that with our complimentary skill sets we can build something to make the healthcare ecosystem more efficient.”
Yadav said, “Shaikh was working full-time on Biddano while I had continued with my job. We had agreed that he will run the company till we are able to raise funding.”
The wrong ‘bid’
Before the arrival of major online pharmacy players on the scene, Biddano was trying to solve the problem of affordability of medicine without disrupting the ecosystem. In this business to customer model, the patient would scan the prescription and upload it on the Biddano platform. The pharmacies could then ‘bid’ for the order and offer discounted rates directly to end customers.
Sharing his learnings, Shaikh said, “Digitising the overall healthcare ecosystem was a tough task. Pharmacists, stockists and healthcare service providers have always been super traditional in terms of their approach. Their inclination towards adopting the digital technology platform has always been very low. They were sceptical to working with technology startups as they feared losing business.”
“We wanted consumers to have better comfort and convenience and the price benefits through local pharmacies. Today, anyone ordering through e-pharmacies has to wait for at least 24 hours to get their medicines delivered. We would have reduced the delivery turn-around time from 24 hours to 35 minutes. But pharmacies did not realise that sooner or later the behaviour of consumers would shift. We were ahead of the time. We had anticipated what would happen, but retailers with whom we were working didn’t realise that. We learned a hard lesson,” he added.
Despite the inertia, Biddano had managed to get early traction and onboard around 500 pharmacies in Pune. This B2C model continued till 2018 after which Shaikh and Yadav decided to pivot.
Yadav says, “Being a startup founder and entrepreneur, you always keep your eyes and ears open. We identified other opportunities. We realised that retailers, offline and online, were struggling to provide the services and products on time to the consumers. The root cause of this problem was the way the B2B healthcare supply chain is managed. From a business perspective, it made sense for us as there were no players or technology company focussing on this market at its core to organise it. We already had a technology platform which could connect pharmacies, stockists and distributors along with a hyperlocal logistics network of our own. We knew the ecosystem and hence we decided to pivot and provide logistics services to stockists and pharmacies.”
In the offline world, every time you walk into a pharmacy and if the prescribed medicine or other product is not available, the pharmacist asks the customer to come at end of the day and delivers the product. What happens in the backend is interesting.
Explaining it further, Shaikh says, “Every pharmacy buys products from 10 to 20 different distributors or stockists. These stockists rely on their local delivery boys or courier services. But there is no technology, tracking, coordination or reliable solution available to them. Hence the time taken to deliver the medicines from a stockist situated in Sadashiv peth to a pharmacy in suburban areas like Hadapsar is more than 12 hours. We thought there has to be a better solution.”
“Every city has its own ‘dawa bazaar’ where all the stockists are located and they supply all the products to pharmacies within a city. In the case of Pune, the pharmacy market is Sadashiv peth area. So, there is one pick up point and one or many drop points (pharmacies). Due to this inefficiency, the cost for pharmacy and in turn the end consumers also increase,” Shaikh said.
Shaikh and Yadav realised this market gap can be addressed with Biddano platform. That’s when they pivoted their business model.
Yadav says, “The B2B healthcare market was even more difficult to crack than B2C because the mindset of stockists, distributors, pharmacies and the brands was very different. Understanding the nuances of the industry like moving a product within certain parameters, temperature control products, ice packs, insulin injection, hospital supplies, etc took us a while. Chemist Association Pune District (CAPD) was one of our early supporters. We started with a surgical and general stockist in Sadashiv peth called ‘Krishna Agency’. Their major supplies were to the hospitals, but they gave us the entry into this B2B market.”
Shaikh said, “It took us 10 to 15 visits to onboard one stockist and get the first 10 orders. We got other stockists onboarded through referrals since it’s a close community. Even though our cost of customer acquisition has been very low, we still had a significant burn because we had to match the pricing and the commercials of the local courier companies which were operating in this ecosystem. Managing the business at a corporate level with local expenses is tough. We had to bridge that gap and now we are very close to that.”
Biddano is now revolutionising offline pharma distribution networks by bridging supply-chain gaps between distributors and chemists through technology.
‘Healthcare Logistics Platform’ was the first product launched by Yadav and Shaikh in late 2018. They found the product-market fit in six months. After scaling up from the Pune market to the Pimpri-Chinchwad market, the founder duo started approaching investors.
Sharing his investor experience, Yadav said, “Initially for two years we had bootstrapped and put our own money. We both did not have any network in terms of start-ups and didn’t know a single investor. The only thing we had was a belief in the business. We knew that this is a scalable business. I used to send LinkedIn requests while working in the office. I connected with people, gave them a basic introduction and hand over the lead to Shaikh. He then used to meet them. The first person who entertained us was the ex-cofounder of Infibeam and Angel Investor Sachin Oswal. We set up a meeting and he blasted us left, right and centre. He was testing our patience and conviction levels. The next day he sat in the office for two hours and helped us in making the PowerPoint presentation and business model. He introduced us to the first investor, the leading healthcare influencer in the country, Dr Ashwin Naik, ex-cofounder of Seraniti.”
“We met Naik in Aundh. Shaikh opened his laptop, but Naik told him to close the laptop. At the end of two hours chat with him, without looking at PPT or anything, Ashwin offered us ₹25 lakh. He was the first who believed in us,” recalled Ashok.
According to Shaikh, “You can change the behaviour of the consumers in terms of buying the products online, but you can’t change or influence the decisions about what products they want to consume. No matter how much information you put on websites unless the doctor recommends a particular product, consumers are not going to buy it. That’s how the Indian mindset and market are. We understood this thought process and we thought of leveraging the existing network of 1 million pharmacies and the stockists and then building technology solutions to make the systems more efficient. With efficiency come the profits, cost savings and other advantages.”
Revealing their future plans, Yadav said, “We are launching our own SaaS ERP that will make sure that every single pharmacy and distributor in the pharma business is using a single platform across the country. It will help reduce the wastage of medicines. Today three per cent wastage costs us around ₹3,000 crore.”