Last year the United Nations Office on Drugs and Crime estimated that the global trade in fake pharmaceuticals would top $75 billion by the end of 2010, marking a 90 percent increase since 2005. Nigeria-based Sproxil, which was founded in 2005, uses scratch off codes and text messages to help consumers authenticate medications using the same process many use to add airtime minutes to their prepaid accounts.
Ashifi Gogo, Sproxil's CEO, said that the rate of growth for counterfeit drugs is surpassing pharmaceutical companies' own production rates. According to a 2005 Interpol report, about 80 percent of drugs sold in Nigeria's capital Lagos were counterfeit.
Sproxil recently pitched investors through Reuters Small Business presents video series. Sproxil CFO Alden Zecha said that the startup brought in less than $100,000 (USD) in revenue last year, which was the year of its founding. For 2010, Zecha expects Sproxil's revenue to top $1 million. In order to expand its sales team, Sproxil is looking for a venture capital injection of between $3 million and $4 million during the next year.
Finding investors has been one of Sproxil's greatest challenges, according to Zecha because investors are reluctant to work with a startup focused on the African market, he said.