Counterfeit products have become a global pandemic that has adversely affected businesses and the global economy. There has been a huge increase in poor quality and counterfeit goods in African markets ranging from pharmaceuticals to FMCG, leading to risk in consumer health.
In 2020, the World Health Organisation reported that 70% of all drugs present in Nigeria were second-generation goods. Such imitations are usually falsified products, labels and packaging designed to look like those of genuine products. The aim is to confuse or deceive consumers as to their quality, source, origin, or legitimacy.
Nigerian blockchain startup, Chekkit is trying to solve this problem through its product authentication and distribution tracking solution. The company has closed a $500,000 pre-seed funding round. Investors in this round include Launch Africa, Japan Strategic capital, Blockchain Founders Fund, and two syndicate groups of angel investors. Completing the funding is a grant from the Orange Corners program.
Chekkit was founded in 2018 by Dayo Odumade and Oluwatosin Adelowo. When Odumade was in Ghana attending MEST (Meltwater Entrepreneurial School of Technology) he met a pharmacist who was attending the program as well, and she told him about a patient they lost due to counterfeit medication. This conversation birth the idea for Chekkit. The major issue was not just about fighting counterfeit products but doing so in a way that consumers are involved and eager to actually confirm the products they buy and use. The company has since expanded to include data collection.
“We discovered how hard it was for FMCG and pharmaceutical companies to access credible data and insights about their consumers,” Adelowo told Nairametrics. “The solution has grown to offer those types of functionality. We now offer solutions around counterfeit protection data collection as well as consumer engagement.”
With Chekkit, consumers can verify products through the app by scanning barcodes or using USSD for confirmation. Similarly, the company provides insights on consumers back to the manufacturers where they can choose to act on it by using rewards and loyalty programmes or upsell to customers.
Adelowo also pointed that users can report a fake, expired or bad product on the ChekkitApp. What the company does is that they share this information with regulatory bodies and the product manufacturers. Chekkit is constantly working with regulatory and standardisation bodies like NAFDAC, GS1, and the FCCPC to ensure that the products we use are safe and of the best standards for consumption.
New funding and expansion plans
Adelowo said they understood that the problem of counterfeit was majorly in Africa and Asia. So, they started in Nigeria first and expanded to Afghanistan through their blockchain partner Fantom Foundation who was already in talks with the Ministry of Health in Afghanistan to help the country with its pharma product counterfeiting problem.
“We started last year with a pilot and did 80,000 products just to show that this solution works. In the next one year, we will be tracking and verifying 200 million products in the Middle-Eastern country,” Adelowo said.
The new funding round will be used to deepen operations in Nigeria and Afghanistan and further develop their anti-counterfeiting and consumer engagement solutions. The funding will also be used to build a robust supply chain tracking and infrastructural optimisation technologies.
According to Adelowo, “Our goal at the end of the day is to be able to track products as they’re leaving the warehouse through every point in the supply chain, till it gets to the final consumer. So, part of this funding will be used to help brands optimize their supply chains”.
What they are saying about Chekkit’s new funding
Dare Odumade CEO of Chekkit said, “We are super-pumped about the future as we develop unique technological products to protect the lives of millions and also directly improve the act of doing business for several brands by learning about consumers in the largely informal African markets.
“We will be launching the first consumer intelligence software-as-a-service for consumer brands to create end-to-end loyalty campaigns, aggregate engagement data and distribute rewards in-house and with their marketing agencies for the first time ever, enabling consumers to directly interact with brands through QR and USSD shortcodes printed directly on the product package.”
Biola Alabi, co-leader of one of the angel syndicate groups said, “Investing in Chekkit Technologies was a no brainer, they are tackling the scourge of fake drugs in Nigeria and across emerging markets globally, one of the biggest challenges still facing the pharmaceutical and healthcare systems in Africa is fake and substandard drugs, weak regulatory environments and lack of consumer education. Fake and substandard drugs are responsible for thousands of deaths annually across Africa.
“Chekkit is already working with governments to strengthen and heighten pharmacovigilance, patient education and advocacy. The application/platform is saving lives by simultaneously detecting and notifying consumers, manufactures and policy makers from the minute fake or substandard drugs are detected. I’m excited that the company is building and using blockchain to build out its solution. Chekkit with an experienced team, local and global traction, are poised to save more lives and I’m proud to be an investor and lead a team of other investors to build”.