The pandemic tested the resiliency of the global supply chain across nearly every industry. This stress test forced companies and industries to evaluate their supply chain risk and operations to mitigate the possibility of continued and future disruptions – none more so than the healthcare industry, which faced shortages of PPE and critical equipment at the early onset of the pandemic. Vamstar is a global procurement and sourcing platform for the healthcare industry that automates the manual processes needed in order for buyers and suppliers to transact. The platform also provides real-time visibility into the healthcare supply chain for healthcare institutions to minimize the risk of future shortages. Digitizing the procurement process introduces transparency and efficiencies allowing buyers truly achieve value-based healthcare and unlocking new sales opportunities for suppliers with both parties now able to transact confidently. By leveraging machine learning and natural language processing, Vamstar is able to connect the correct parties to the most relevant opportunities, eliminating the arduous manual procurement process.
London TechWatch caught up with Vamstar CEO and Cofounder Praful Mehta to learn more about the business, the company’s strategic plans, latest round of funding, which brings the total funding raised to $11.4M, and much, much more…
Who were your investors and how much did you raise?
We’ve just announced the close of our $9.5M Series A funding round. Alpha Intelligence Capital (AIC) and Dutch Founders Fund (DFF) led the round, which also included existing investors btov Partners and Antler.
Tell us about your product or service.
Vamstar is an AI-enabled global B2B healthcare supply chain platform. The company’s cloud-based supply chain technology connects both buyers and suppliers to automate key business processes, implementing data and outcome-based analytics into meaningful action. This empowers the healthcare ecosystem to move fast, operate efficiently and achieve great synergies, enabling better patient care while maximizing industry savings for clients.
What inspired the start of Vamstar?
Vamstar was inspired by the everyday struggle encountered by healthcare buyers and suppliers everywhere: being able to trade easily and effortlessly with each other. This is something I personally experienced within my two decades of working both within large corporations and as well as for smaller companies in the healthcare market, and I decided to embark on the journey with two of my cofounders to ensure that folks within the buyer and supplier teams don’t have to waste time in manual processes but instead focus on higher-order thinking to resolve the future healthcare challenges that we face as a society.
Suppliers need buyers for their products and services, but the current manual processes involved in engaging with traditional healthcare sourcing and procurement are costly, complex, and cumbersome. Many even suffer from a lack of comprehensive insights into supply and demand. This is especially problematic for buyers: hospitals, laboratories, clinics, and corporations, which have incomplete or poor data on suppliers in the market, leading to increased supply chain risk and higher transaction costs. These inefficiencies may remain hidden during normal times but become obvious in a crisis, such as the COVID-19 pandemic or increasing inflation that continues to disrupt supply chains.
We founded Vamstar to overcome these very problems by offering an AI-enabled supply chain platform that centralizes and shapes data in one format and reduces the inefficiencies of the transaction process. We wanted to make it easy for the buyer sourcing and procurement teams to connect with supplier commercial teams to collaborate while optimizing the supply and demand connections. We also wanted to introduce new ways to drive efficiency for both buyers and sellers in the marketplace across the network, and provide greater supply chain sustainability.
How is it different?
Vamstar is different in that it uses Big Data and Machine Learning to enable smart sourcing, faster tendering, simplified contracting, real-time opportunity matching, embedded intelligence, and related services, including the web-based trading of healthcare products between clinics, corporations, hospitals, laboratories, and suppliers. By seeing the big picture and all the connections, Vamstar provides healthcare stakeholders with valuable market insights and perspectives.
What market you are targeting and how big is it?
We are in the Global B2B Healthcare E-commerce Market. According to ResearchandMarkets, the global healthcare e-commerce market is expected to grow from $181 billion in 2019 to about $311.3 billion in 2020, and is expected to stabilize and reach $382.8 billion at a CAGR of 20.6% through 2023.
What’s your business model?
We have developed our entire AI-enabled infrastructure to facilitate the transaction between buyers and suppliers, and make it leaner, efficient, and data-rich. Keeping in mind with that simplicity, we work with a number of options from full platform (EDI integration) to simple web-based sourcing (RFXs) and procurement of medical goods and services. We offer simple SaaS-based and Pay-as-you-go approaches.
What are your post-COVID office plans??
We are a hybrid working company with different teams working remotely and within offices.
What was the funding process like?
As we are scaling fast within the industry, we wanted to bring in the right partners to take the business to the next stage of growth. The excitement to be a part of our round was very high from not only traditional venture capital funds but also from large private equity groups. It was a great and collaborative process to bring the best funds to the table to scale us to the next stage of the business.
What are the biggest challenges that you faced while raising capital?
The biggest challenge was to identify the right partners to collaborate with in this journey. Healthcare investing is different than investing in other industries, and as we are laying the AI-enabled infrastructure for the future of the healthcare industry’s commerce, we wanted to bring the right mix to the table. We feel very lucky to have very supportive investors who understand what it takes to grow an AI-enabled healthcare business from scratch.
The biggest challenge was to identify the right partners to collaborate with in this journey. Healthcare investing is different than investing in other industries, and as we are laying the AI-enabled infrastructure for the future of the healthcare industry’s commerce, we wanted to bring the right mix to the table. We feel very lucky to have very supportive investors who understand what it takes to grow an AI-enabled healthcare business from scratch.
What factors about your business led your investors to write the check?
Greenfield opportunity, large market size, and scalable approach.
What are the milestones you plan to achieve in the next six months?
Our goal is to expand the network within Europe, Middle East, and the APAC markets by bringing in buyers and suppliers to the network and being able to process large volumes of transactions through our supply chain ecosystem.
What advice can you offer companies in London that do not have a fresh injection of capital in the bank?
There are many avenues of funding available today and it is worth exploring every option to find the best capital solution for your business. The bigger question is what value you’d be able to create with that capital and whether that will be for the long-term or not.
Where do you see the company going now over the near term?
We will be scaling the Commercial, Data, and Product teams, and accelerating our Go-to-market motions to expand the Vamstar network.
What’s your favourite outdoor activity in London?
Networking and meeting new people from different walks of life, and helping our communities to grow together.
