WHAT do a leading Glasgow surgeon and a former top ICI
executive have in common?
The answer is that they are
the driving force behind Unipharma.net - one of Scotland's new Internet companies.
They may seem an unlikely pair, but a business angel came on board too, providing part of the capital that helped the company get started and brought a lot of the financial expertise that helped it succeed.
Now the business, which supplies retail chemists with basic drugs with minimum fuss and at discount prices, is looking to
venture capitalists with more cash at their disposal to fund the next stage of growth.
Eric Hunter is one half of the duo which set up Unipharma earlier this year. His background is more commercial than medical.
''I left Glasgow for a couple of years in 1975 to get ICI's name on my CV,'' Hunter said.
''Two years turned into 20 years spent travelling the world in a business development role
''After coming home and a
couple of spells working for Scottish companies, 1999 saw me looking for something to get my teeth into.''
Hunter's search for a new challenge led him to sign up with Business Ventures, the Glasgow-based Scottish Enterprise subsidiary which helps people create and run their own businesses.
It was at a Business Ventures meeting that he met Hesham Mehanna, an Egyptian-born ear, nose and throat specialist.
''Hesham told me that he had a number of friends who were pharmacists and they spent an enormous amount of their time trying to source generic drugs such as amoxycillin (an anti-biotic) and omeprazole (an ulcer treatment).
''He believed that the Internet could be used to streamline the process.''
It was an idea that needed
further exploration, and Hunter spent the next two months visiting pharmacists to research the potential market. What he
discovered was a buying process which consigned the pharmacist to the back office two or three times a week to go through long price lists to compare prices and work out who to buy from.
''It was a process tailor-made for streamlining, and Hesham and I decided to give it a go.'' But of course they needed money.
Eventually the duo put together a #350,000 funding package.
Hunter said: ''In broad terms a third came from Hesham, his family and myself.
''Another third was pledged by two business angels and the
balance came from loans and grants from the Glasgow Development Agency, Glasgow Regeneration Fund, and the Govan Initiative.''
In the end only one business angel came on board, Graham Barclay, a former chief financial officer with Glasgow fund manager Murray Johnstone. He is now Unipharma's finance director.
The company was launched in March and, so far, progress has been highly satisfactory.
''Our target market is the UK's 7000 independent pharmacists,'' Hunter said.
''Our secure site enables them to compare prices of both generic and branded drugs imported from Europe and then place their order.
''It costs them nothing - we make our money by charging
the drug wholesalers and manufacturers.''
The site is supported by a Glasgow-based call centre to
provide back-up assistance.
So far Unipharma has signed up 8% of the available market and the number is increasing daily.
''In essence Unipharma is an
e-business hub in a messy, fragmented market. We are succeeding because we can make the process more efficient and save cost for both buyer and seller.'' Hunter believes that one of the key factors in progress so far has been their Internet site.
''It took a great deal of persuasion to win many of the pharmacists over, but when they tried the site they liked it and found it easy to use,'' he said.
Unipharma's business plan projects a turnover of #1.1m in year two and #4.5 in year three. But it will require a big cash injection to fund this expansion - more than individual angels can provide.
Hunter explained: ''We need an investment of about #3.5m for software development, marketing, and to recruit more people to help build the business.
''We are just beginning to talk
to the venture capitalists about funding packages,'' he added.
Barclay's substantial experience with Murray Johnstone should prove useful in these funding
discussions.
Hunter said: ''His background complements our skills and we now have a strong management team in place that future investors can put their faith in.''
Stuart Paul lectures at Paisley Business School
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