Abu Dhabi, UAEWednesday 11 December 2019

Generation Start-up: Egypt's Chefaa plans Series A funding in January 2020

Cairo-based health-tech start-up plans to expand in the Gulf and Africa

Doaa Aref and Dr Rasha Rady, co-founders of Cairo-based start-up Chefaa, which they set up in May 2017. Courtesy Chefaa. 
Doaa Aref and Dr Rasha Rady, co-founders of Cairo-based start-up Chefaa, which they set up in May 2017. Courtesy Chefaa. 

When Doaa Aref was diagnosed with thyroid cancer two years ago, she became increasingly frustrated with the struggle to track down and order her medication — let alone get it on time for scheduled doses.

This led the now-recovered digital marketing specialist to team up with medical doctor Rasha Rady to set up Cairo-based start-up Chefaa — which means healing in Arabic — in May 2017. The health-tech start-up allows chronic disease patients to order their medication via a mobile app and get it delivered to their doorstep on a regular basis.

Demand from chronic patients is big and increasing and no one is looking at this.

Dr Rasha Rady, Chefaa

"We started Chefaa with the idea of connecting patients to pharmacies for safe, easy, fast access to medication," Dr Rady, Chefaa's co-founder and chief operating officer, told The National. "Demand from chronic patients is big and increasing and no one is looking at this.

The healthcare market in the Middle East is growing rapidly, spurred by burgeoning populations and growing urbanisation. The region's healthcare sector is forecast to grow to $243.6 billion (Dh894.6bn) by 2023, from $185.5bn currently, according to Fitch Solutions.

Egypt, the Arab world's most populous nation, is facing a mounting burden of non-communicable diseases (NCDs) that account for 82 per cent of all deaths, according to the World Bank. The Washington-based lender says chronic conditions have been found to cause productivity losses equivalent to 12 per cent of Egypt's gross domestic product.

The idea behind Chefaa is to address the growing prevalence of NCDs, make it easier for patients to access medication and stem the loss in productivity — all using data-driven solutions and AI.

“As a paediatrician, I know how chronic patients live their lives: if they miss doses, they could end up with complications and the cost of that is higher than if you manage the disease sustainably — it’s about being cost-effective,” Dr Rady said. “Once patients have sustained access to medication and knowledge of their condition, how many work days won’t be missed? That will reflect in the income of the individual and on the national GDP.”

Chefaa's app is free for patients and allows them to scan their prescription, pay by cash or card, then submit the request to the nearest pharmacy using GPS. The pharmacy gets the notification of the order on its own app interface: if it has the required medication, it accepts and delivers the order. If not, the app automatically forwards the order to the next pharmacy until the medication is traced and delivered, cutting down time and effort for patients.

"It's all delivered hassle-free within 30 minutes or less," Dr Rady said.

The start-up also runs a corporate social responsibility initiative that enables chronic patients on low-incomes, validated by certified non-profit organisations, to gain access to medication.

Chefaa currently operates in nine governorates including Alexandria and Aswan with plans to cover the entire country by the first quarter of 2020.

Since its operations began in April 2018 until September 2019, Chefaa has recorded 152,000 orders and earned $2m in sales, according to Dr Rady.

In the year to October, the company tallied more than 150,000 orders with sales reaching more than $2.25m.

With a network of 809 pharmacies signed up to its services, Chefaa is also currently in final-stage talks with insurance brokers to add three medical insurance companies to the platform. The aim is to provide them with AI and data-driven methods to process claims.

In August, Chefaa secured seed funding through Flat6labs and 500 Falcons, the Middle East fund run by Silicon Valley-based 500 Startups. It raised a "six-figure dollar" amount, but declined to specify how much.

To meet growing demand and accelerate its growth, Chefaa is planning a Series A funding round in January 2020 as it eyes markets outside its home base.

The duo behind Chefaa are planning to take their business into the Gulf, starting with Saudi Arabia, followed by a foray into African markets such as Nigeria.

“We are targeting investors who can act as strategic partners to help us achieve our milestones. This includes investors with experience in the healthcare sector or in start-ups within the GCC and Africa,” Dr Rady said, declining to reveal how much they aim to raise.

Healthcare expenditure in the GCC is projected to grow to $104.6bn in 2022 from an estimated $76.1bn in 2017, according to Alpen Capital’s GCC Healthcare Industry report of March 2018. Annual average growth rates are expected to range between 2.6 per cent and 9.6 per cent among GCC countries, with the UAE and Oman likely to grow faster than 9 per cent. Saudi Arabia and the UAE will continue to dominate the sector with a combined market share of over 80 per cent in 2022.

A growing population, high prevalence of NCDs and increasing availability of health insurance are driving growth in medical spending across the Gulf, the report said.

“The GCC countries have been observing a swift transition to non-communicable diseases, a major cause of most of the deaths and disability in the region. Considering the high cost and length of treating such lifestyle ailments, healthcare expenditure in the region will rise,” the report said.

Chefaa has already seen interest from potential investors for its Series A funding, Dr Rady said.

The start-up, which reached break-even point in May 2019 and is currently cash-positive, is targeting milestones of one million orders and then three million orders next, she said.

“The digital transformation of healthcare is coming whether we like it or not,” Dr Rady said. “Now it’s just about the need to make that safe.”

Along her entrepreneurial journey, Dr Rady says she has learnt some valuable lessons from her entrepreneurial journey.

"As a medical doctor with more than a decade of practice, my definition of failure was losing a patient, which makes it very difficult to accept. As an entrepreneur, I am starting to learn that failure is actually the first step to success," she said.

"Entrepreneurship is a new language I am learning to speak and thanks to my co-founder who has an MBA and PhD in business analysis, I am learning fast."

Updated: November 16, 2019 07:59 PM

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