Adam Hunter, Chief Commercial Officer of Accelerator company Phlo, discusses their Crowdfunding campaign, the second largest in Europe in the health-tech sector in 2020, and offers his three top tips for crowdfunding.
Phlo Digital Pharmacy was launched to redefine the Pharmacy sector in the UK and empower patients to access their medication when and where they need it. If you assess the traditional bricks and mortar Pharmacy sector, there haven’t been many fundamental changes to their structure in 300 years. Patients still travel to a pharmacy and a pharmacist dispenses a medication based on a prescription or an “over the counter” medication. The types of treatments have certainly changed but the patient experience has not.
The first real change to the sector was online pharmacies using a mail-order delivery mechanism. This is a straightforward system where a patient orders their medication online and a central warehouse somewhere in the UK dispatches the medication via a mail order service taking a couple of days to arrive with the patient. In the online sector, this is the predominant business model. However, there are two key challenges to this approach:
1) Phlo’s market research informed us that patients were uncomfortable receiving their medication in the post and don’t trust mail order services to deliver on time (we believe this to be one of the key reasons that the online pharmacy sector only amounts to 1.5% of the UK prescription market); and
2) These businesses can’t offer an acute prescription service as the speed of delivery is critical for one-off prescriptions.
This is/was the backdrop to which we launched Phlo Digital Pharmacy. We believe that for online pharmacies to truly penetrate the Pharmacy sector in the UK you must be able to address the two points outlined above. We believe that we have addressed these barriers to adoption by providing the UK’s first online pharmacy providing an on-demand, same-day delivery service across London. Phlo empowers patients to easily manage, order and track their medication in real-time from Phlo’s pharmacy to their door with an average delivery time of two hours. Phlo’s patients can order their acute and repeat prescriptions when and where they need it, scheduling a time slot which suits them. We always looked at Phlo as a generational business however Covid-19 has accelerated our growth and the feedback we’ve had from patients for our service has been phenomenal.
We decided late this year that to capitalise on the market opportunity we needed to raise some additional funds to help roll out our “city hub” model across England in 2021 and grow our team to develop and deploy new features to the Phlo offering. In late October 2020, Phlo launched the UK’s first crowdfunding campaign for an online pharmacy. We believed that this would be a great way to raise Phlo’s profile with patients across the UK and gain a number of ambassadors to tell the Phlo story. We were delighted to have raised over £2.1 million coming from over 1000 investors.
It was a tough and demanding campaign and the due diligence carried out by investors was thorough. This however allowed us to discuss Phlo and share our vision of the pharmacy sector in 2030. It was a real public test of our business model and I am delighted that we passed this examination with flying colours. For anyone considering a crowdfunding campaign here are three key lessons I’ve learned:
1. Have a cornerstone investor lined up before you launch your campaign. This will help you reach your initial target and generate momentum right from the start.
2. Carry out an integrated campaign. You can’t rely solely on the crowdfunding platform to drive investors to your page. You need to carry out an integrated marketing and PR campaign to maximise awareness of the crowdfund. If you are a direct-to-consumer business like Phlo then harnessing your existing user base is vital.
3. Documentation – Phlo has experience of creating an investors pack and we developed a bespoke package of information for investors to review and assess. This is vital to assure prospective investors that you have done your research and are credible as a team/organisation.
Phlo now plans to scale its same-day delivery operations across England. Our first “city-hub” outside of London will be in Birmingham which is due to launch in early 2021.
You can find out more about Phlo Digital Pharmacy at www.wearephlo.com