After the 2013 Westgate mall terrorist attack in Kenya, Mimosa pharmacies—a chain of four locally founded stores—began struggling financially as its largest store was destroyed. Mimosa caught the attention of officers at Catalyst Principal Partners, an IFC-sponsored private equity firm, which created a plan to develop a new chain with local partners. But the financing wasn’t quite there yet.
Most of Kenya’s pharmacies are unlicensed, and there are few nationwide chains. Fragmented distribution networks result in higher drug costs for consumers as multiple wholesalers mark up prices. Further, counterfeiting of pharmaceuticals is a serious health risk.
IFC wanted to help improve the market by investing in high-quality retail pharmaceutical provision. An initial investment of $4.5 million, in conjunction with an additional primary capital infusion from Catalyst Principal Partners, supported the growth of the company—re-branded Goodlife Pharmacies. The investment helped create hundreds of jobs and provide good quality pharmaceutical products to thousands of Kenyans. The success of IFC’s investment was clear by late 2016, when Goodlife was acquired by Leapfrog Investments—another IFC investee—for $21 million. This was the biggest-ever investment in the East African retail pharmacy sector. Today, Goodlife is East Africa’s largest pharmaceutical retail company.
IFC announced in January 2018 a second investment, of $3 million, in Goodlife to help expand the number of outlets from 32 to over 100. Stores will open in areas that do not have pharmacies with licensed providers and pharmaceutical products, in addition to mall locations.
Goodlife’s growth will ultimately serve over 5.5 million customers and employ additional skilled pharmaceutical workers. This is a pivotal step in the consolidation and formalization of the region’s retail pharmacy industry, broadening the reach of high-quality health provision throughout the area.
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