[YS Exclusive] Y Combinator-backed healthtech startup Farmako raises $1.6M for expansion

Gurugram-based quick medicine delivery startup Farmako has raised $1.6 million from 535 West Capital, Bayhouse Capital, Goodwater Capital, Unpopular Ventures, Jude Gomila, and existing investors.

The company will use the fresh proceeds to further expand into Delhi and Gurugram. The startup is also in talks with some investors to close a Series A funding round later this year, confirmed the founders during an interaction with YourStory.

Founded by college friends Aman Bhandula, Kaishu Sahu, and Nikhil Kumar, Farmako was started as an AI-powered EMR (electronic medical record) app for doctors to write digital prescriptions. It received backing from Y Combinator in 2020 and in March 2023, pivoted to quick medicine delivery.

The pivot story

"When we started Farmako, we used to think that we would first solve the problem of health records in India. Once we build this, we will launch services like quick medicine delivery, and fast diagnostics. We were looking to build something that makes it easy for anyone to add their health records to Farmako," said Bhandula, Founder and CEO of Farmako.

The company also built a health ID product and onboarded over 3.5 million health records.

Inspired by the government's Ayushman Bharat Digital Mission (ABDM) initiative, the startup decided to partner with the government on a long-term EMR vision.

"We decided that it would be better to partner with the government on our long-term EMR vision and we can straightaway launch services like quick medicine delivery. Also when we were building the EMR SaaS, we got a lot of requests from users for medicine delivery. Hence, we pivoted," he added.

Farmako ran an experiment in Gurugram, partnering with local pharmacy stores and Swiggy Genie for 30-minute medicine delivery. It saw a huge demand and decided to pivot to quick medicine delivery.

"We believe retail pharmacy is a huge market ($25 billion+) in India, and the current e-pharmacies run on the central warehouse, outdated software stack, and discount-driven models. In India, local brick-and-mortar pharmacies serve more than 90% of the market. We believe that we can provide a better value proposition to users with our quick delivery and personalised app, especially in Tier I cities in India," noted Bhandula.

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Quick medicine delivery

"We are working on making the ordering experience even faster on the app and adding options like a personalized AI Health Assistant,” he added.

Farmako operates on an AI system that help process prescriptions and deliver medicines faster.

Currently, it has three pharmacies in Delhi, Gurugram, and Moradabad, and claims to be completing more than 16,000 deliveries a month. The company's annual gross order value exceeded $1 million, it told YourStory.

Explaining the process, Bhandula said, "Users can order via our mobile app and WhatsApp. They get connected to our pharmacist on a real-time chat, who helps them place the order. We have our in-house team of riders who pick up medicines from our store and deliver them in just 30 minutes."

Farmako has over 120,000 app downloads and 4,00,000+ WhatsApp users. It is an official partner of the Government of India’s ABDM programme and is fully ABHA compliant.

"We are also building an AI healthcare assistant in our mobile app which will be connected to your ABHA health ID and will provide personalised suggestions to improve your health and lifestyle," Bhandula stated.