By Heather Landi

Silicon Valley startup NowRx is teaming up with Hyundai Motor Group for a pilot project testing last-mile medication delivery, with an eye toward testing autonomous vehicles down the road.

NowRx, a digital pharmacy that offers same-day and same-hour prescription medication delivery as well as telehealth services, plans to roll out the pilot project later this year, serving two micro-fulfillment centers in the Los Angeles area.

The pilot includes aspects of automated dispatch, fleet management and other last-mile optimization technologies.

“Autonomous vehicles are part of our long-term strategic vision for NowRx to further reduce delivery costs at scale,” said CEO and co-founder of NowRx, Hatem Dowidar in a statement. “We can’t imagine a better company to work with than the Group, which has demonstrated substantial leadership in the autonomous vehicle, and other robotics and automation areas.”

As part of the collaboration, Hyundai will provide slightly modified Hyundai Ioniq 5 vehicles that will not be fully autonomous and will have drivers behind the wheel, according to a NowRx spokesperson. The Ioniq 5 is Hyundai’s latest, all-electric SUV.

The plan is to use the vehicles to test, simulate and gather data on autonomous vehicle delivery, evaluating delivery statistics, dispatch and customer interactions and feedback. If the pilot goes well, NowRx will increase the scope to progress to more fully autonomous vehicles, but there is no set timeline for that phase, the spokesperson said.

NowRx uses proprietary software and customized dispensing robotics to provide free, same-day prescription delivery and telehealth services. The company’s proprietary QuickFill system automates prescription processing and dispensing in under 30 seconds while also minimizing common pharmacy errors and reducing dispensing costs to a fraction of major retail chains, according to company executives.

The company plans to combine these capabilities with Hyundai Motor Group’s smart mobility solutions to provide a seamless healthcare experience to end consumers.

Breese launched NowRx in 2016 to reinvent the pharmacy experience. The company was designed around the idea of eliminating brick-and-mortar pharmacies, replacing them with a logistics-driven pharmacy distribution model. The company also operates micro-fulfillment centers and uses proprietary pharmacy software, robotics, AI and last-mile logistics to provide free same-day delivery of prescription medications.

Currently, the company uses a manual process to design and prepare the optimal delivery routes for each driver throughout the day. Typical routes include six to 15 stops for deliveries. NowRx aims to develop software to make this process—preparing delivery routes and stops—automated.

“The Group expects this collaboration with NowRx to help expand our mobility business model beyond the anticipated industry,” said vice president of Hyundai Motor Group and head of the open innovation strategy team, Minsung Kim in a statement. “We believe a new opportunity with the technologically innovative e-pharmacy NowRx, that uniquely integrates pharmacy management and delivery service, supports our movement toward a smart mobility solutions provider.”

NowRx has eight licensed micro-fulfillment pharmacies spread across the San Francisco Bay Area, Orange County, Los Angeles and Phoenix with more than 64,000 customers and 487,000 prescriptions successfully delivered to date. There are four more pharmacy locations in the works.

The company also launched NowRx Telehealth in March 2021, targeting the US$61 billion global telehealth market. That service saw 1,200 per cent growth in 2021, the company reported.

The company has charted strong growth in the past two years, reporting US$13.4 million in revenue in 2020, up a massive 90 per cent from the prior year. Since 2016, NowRx has steadily grown revenue from just shy of US$700,000 to US$22 million in 2021.

Its current annual revenue run rate, based on March 2022 revenue, is US$32.3 million, the company said.

NowRx has raised US$79 million to date, according to Crunchbase. For its latest funding round, the startup decided to avoid venture capital dollars. The online pharmacy aims to raise US$73 million in series C funding through SeedInvest, an equity crowdfunding platform.

It’s raised US$22.5 million on SeedInvest to date, with 7,400 investors committed to the round.

This is not NowRx’s first crowdfunding raise—it’s its fourth—and the company’s previous round, which raised US$20 million, was oversubscribed and was the largest raise on SeedInvest at that time, according to NowRx executives.

The company’s growth comes as digital pharmacies have gained steam—and investors’ support—in recent years. These startups are looking to compete with retail giants like CVS and Walgreens and are pushing forward under the looming specter of Amazon Pharmacy.

The online retail giant bought Pillpack back in 2018, launched its prescription benefits service last year and unveiled new price comparison features in May.

Ride-share giant Uber also is trying to crack the prescription drug delivery market. Uber Health, the company’s nonemergency medical transportation service, kicked off a partnership with NimbleRx back in 2020 to offer online prescription ordering and drug delivery direct to consumers in Seattle and Dallas.

Among the latest raises for online pharmacies, Alto Pharmacy snagged US$200 million in a series E funding round led by SoftBank Vision Fund, Capsule hauled in US$300 million in April 2021 and SoftBank also backed Cerebral’s US$300 million series C round in December.

But Cerebral is now in hot water over its prescribing practices and is under investigation by the Department of Justice for “possible violations” of the Controlled Substances Act.