Buymed’s 2022 revenue hit $76.4m, losses expanded amid rising competition

Photo credit: Thuocsi

Vietnamese B2B pharmaceutical platform Buymed has reported a 2x year-on-year growth in revenue for 2022, reaching US$76.4 million, according to its latest available financial filings in Singapore.

The startup, having secured US$63.5 million over four rounds of funding to date, also saw a threefold increase in operating losses compared to the previous year, reaching US$15.3 million.

This rise was attributed to heightened administrative expenses, which was driven by a bump in general provisions to US$12.7 million. General provisions are typically capital set aside by the company to settle past obligations. However, provisions that will be reimbursed are considered assets.

Buymed, known as Thuocsi in Vietnam, primarily serves mom and pop pharmacies by enabling them to access drugs from manufacturers and distributors at better prices. The startup, backed by investors like UOB Venture Management, Smilegate, Cocoon Capital, and B Capital, has expanded its marketplace model to Cambodia and Thailand.

Buymed’s CEO, Hoang Nguyen, declined to participate in this story.

Significant cash flow concerns surfaced for the firm in 2022. Although the cash used in the platform’s operating activities for the year went down, it still surpassed the cash reserves reported on the firm’s balance sheet.

This suggests that without a shift in financial strategy, Buymed risked depleting its cash reserves within the year.

In Vietnam, the company’s business relies on whether its main customers – independent drug stores – can survive amid growing competition with large drugstore chains like Long Chau and An Khang.

See also: How this UOB-backed startup disrupts Vietnam’s retail pharmacy

In a previous interview with Tech in Asia, CEO Hoang Nguyen acknowledged that simply competing in drug retail wouldn’t suffice for Buymed. This explains why the startup has expanded to B2B2C franchising, which involves helping drug stores boost their sales through tech-enabled inventory management and other fulfillment services.

Buymed is not the sole pharma-focused company in Vietnam aiming to make significant strides this year.

Nguyen Bach Diep, CEO of FPT Retail, recently announced plans to sell up to 10% of shares in the firm’s pharmacy chain, Long Chau. This move, as reported by local media, will enable the company to raise the number of Long Chau stores nationwide to 1,900 and increase its vaccination centers to 100.

FPT Retail, which is part of the Vietnamese IT conglomerate FPT, wants to build Long Chau into a comprehensive medtech platform that meets all the medical needs of its consumers – from prevention to treatment.