Toronto-based digital pharmacy Pillway has secured a $9.5-million CAD strategic investment from Canadian insurance giant Sun Life.
This all-equity investment, which Pillway classified as Series A financing, marks the startup’s second raise since its founding in 2017, and comes three years after it closed $5 million in seed funding from Well Health Technologies in 2020. To date, Pillway has raised $14.5 million.
“Together with Sun Life, we look forward to building on our initial success and bringing even more innovative and impactful health solutions to Canadians.”
Lak Gill
Sun Life first partnered with Pillway earlier this year to co-develop the Lumino Health Pharmacy app, which launched in June and is now available to Sun Life’s group benefits customers across Canada.
The Lumino pharmacy app connects users with a live pharmacist by chat or a phone call and allows them to order medications for fast delivery. The service also offers users personalized medication pre-packaging and the ability to track usage, manage refills, and receive notifications through the app.
A Pillway spokesperson told BetaKit the startup supplied the technology and backend vertical integration for the co-branded platform.
Pillway said it plans to continue to develop more solutions for Sun Life’s client base and plans to partner with other organizations in the space to develop similar solutions. “Together with Sun Life, we look forward to building on our initial success and bringing even more innovative and impactful health solutions to Canadians,” Lak Gill, CEO of Pillway, said in a statement.
Pillway aims to modernize the traditional pharmacy model by delivering medications directly to patients’ homes as fast as the same day and connecting doctors, pharmacists, and patients to help patients manage their medications. Its platform primarily serves patients with chronic diseases and those who take multiple daily medications.
Pillway’s partnership with Sun Life seems to be following in the footsteps of another Canadian healthtech startup: Montréal-based virtual care company Dialogue Health. The insurance giant initiated a partnership with Dialogue in 2020 and later launched the co-branded Lumino Health Virtual Care product.
RELATED: Sun Life Canada to acquire Dialogue Health Technologies
That same year, Sun Life gained a minority stake in Dialogue, leading a $43-million round that also secured the insurer rights to acquire additional equity. The partnership between Dialogue and Sun Life continued over the next three years, eventually culminating in Sun Life’s acquisition of Dialogue for $365 million CAD in July.
As a result of its investment in Pillway, Sun Life has acquired a minority stake in the startup, with an option to invest an additional $1.5 million. Pillway told BetaKit that the deal grants Sun Life the opportunity to participate in future funding rounds.
In a statement sent to BetaKit, Alison Chick, senior vice president of Sun Life’s health solutions division, said the investment in Pillway is one of the ways Sun Life is looking to “bridge the healthcare gap” for Canadians. When asked if Sun Life plans to acquire additional equity in Pillway, Chick said Sun Life is “continuously looking for products, solutions, and partnerships to empower Canadians to take charge of their health.”
RELATED: Nova Scotia taps Maple to expand free virtual care to the entire province
In the past three years, Canada’s digital pharmacy space has rapidly evolved, largely due to the COVID-19 pandemic’s influence on virtual care. Key players include PocketPills, which raised a $30-million Series B funding round in 2021, Telus Health’s virtual pharmacy app, which was launched nationally in 2022, and Felix, which has been expanding into new health categories this year, including weight loss, coaching, and therapy.
Not all startups in this space have managed to maintain growth since the end of the pandemic. One player in the on-demand virtual pharmacy sector, Mednow, was placed into receivership this month under the Bankruptcy and Insolvency Act, and announced plans to restructure and identify acquirers.
Pillway plans to use the fresh funding to support its expansion and future growth initiatives. One of the startup’s priorities includes growing in provinces where it doesn’t already have a physical footprint. Currently, Pillway has physical central-fill locations in Ontario and British Columbia. The startup presently services all of Canada excluding Québec—where it plans to launch in 2024.
Feature image source Unsplash. Photo by Laurynas Me.