Vietnam-focused private equity firm Mekong Capital on Tuesday said it has provided financing to pharmacy chain Pharmacity out of its Mekong Enterprise Fund III.
This is the eighth company to receive financing from the fund, after it invested in mattress firm Vua Nem in June 2018.
Established in 2011, Pharmacity has become Vietnam’s largest pharmacy network with 186 stores in major cities across Vietnam. The company claims to cater to one million customers who have subscribed to its loyalty programme.
The firm said it plans to expand its retail chain to 1,000 stores nationwide by 2021.
“Our partnership with Mekong Capital will empower us to continue improving healthcare for the Vietnamese people and help accelerate our growth while better positioning us to execute on our vision and mission to build the most convenient pharmacy chain where customers fully entrust their health and wellness,” said Chris Blank, founder and CEO of Pharmacity.
Chad Ovel, Partner at Mekong Capital, added: “The company was the first retailer in this sector to demonstrate that all of Vietnam’s regulations and compliance thresholds can be met and still generate a healthy store level profitability.”
The company retails both Vietnamese traditional and Western medicines, as well as beauty products and vitamins.
The pharmaceutical sector in Vietnam was estimated at $5.2 billion in 2017, according to a BMI Research study. Of that, the retail segment remains fragmented. Modern pharmacy chains represent only about 1.5 per cent of the total number of licensed pharmacies, according to corporate services firm DKSH. However, modern chains have already taken up 5.5 per cent of the total sales value.
Mekong Capital has been known for its strategy of backing private businesses in fragmented markets. Electronics retailer MobileWorld is a notable example. Mekong Capital first invested in MobileWorld when it was a small company and exited the firm for a 57x return in 2018. Now the largest electronics retailer, MobileWorld has also branched into pharmacy retailing by acquiring Ho Chi Minh City-based chain Phuc An Khang.