Saveo Achieves 103X Growth in Pharmacy Supply Chain Market

Saveo, a platform dedicated to pharmacy supply chains and marketplaces, has experienced phenomenal expansion, growing by 103 times since it was established. The company reported a remarkable increase in revenue, reaching Rs 196 crore in FY24, up from merely Rs 1.9 crore in FY20. During this timeframe, Saveo also succeeded in lowering its losses.

Revenue Insights

According to financial statements obtained from the Registrar of Companies (RoC), Saveo’s operational revenue rose by 16.7%, from Rs 168 crore in FY23 to Rs 196 crore in FY24. This growth underlines the platform’s effective business strategy in the competitive pharmacy sector.

Business Model and Revenue Streams

As a B2B pharmaceutical marketplace, Saveo plays a crucial role in linking pharmaceutical companies to retailers. It operates as a procurement hub providing access to generics, surgical supplies, OTC products, specialty medicines, and both allopathic and ayurvedic medicines. In FY24, the sale of these pharmaceutical products constituted Saveo’s primary revenue source.

Expense Management

On the expenditure front, the procurement costs for medicines represented 78% of the total expenses, which surged by 19.5%, rising from Rs 154 crore in FY23 to Rs 184 crore in FY24. Notably, Saveo managed to enhance efficiency by optimising its workforce costs, reducing employee benefit expenses by 24.32%, which amounted to Rs 28 crore for the last fiscal year.

Finance costs experienced a significant increase of 40%, reaching Rs 7 crore, while other operational expenses totalled Rs 16.23 crore for the previous fiscal year. Consequently, Saveo’s total expenditures also rose by 10%, amounting to Rs 235 crore in FY24.

Loss Control and Financial Metrics

The Bengaluru-based enterprise effectively curtailed its losses by 16% to Rs 38.5 crore in FY24 from Rs 46 crore in FY23. Key performance indicators such as Return on Capital Employed (ROCE) and EBITDA margin saw improvement, landing at -225% and -15.69%, respectively.

Operational Efficiency

At a unit level, for every single rupee of revenue earned in FY24, Saveo spent Rs 1.20, an enhancement from Rs 1.27 in FY23. The total current assets reported were Rs 57 crore, which included Rs 10 crore in cash and bank balances for FY24.

Funding and Investor Insights

Based on various startup intelligence platforms, Saveo has attracted a total of $20 million in funding thus far. Notable investors include Matrix Partners holding 11.81%, RTP Global Partners with a 10.42% stake, and Indian Quotient at 9.06%.

Market Trends and Future Outlook

The pharmaceutical sector that Saveo operates within is undergoing significant transformations, potentially occurring once in three decades. This encompasses a shift from traditional medical representative models to the rise of online pharmacies, along with broader distribution of government-supported generic dispensers. Saveo aims to simplify processes for smaller pharmaceutical manufacturers and pharmacists during this pivotal period, focusing on cost control while expanding gradually. Harnessing the technological expertise of its founders, the company strives for an uncomplicated operational framework and appears to be nearing breakeven. A favourable market expansion in pharma manufacturing, coupled with stricter pharmacy distribution regulations, could further bolster their growth trajectory, which is inherently promising.