PersonalRX is raising via a SAFE at a $30 million valuation with no discount. Although this amount is much higher than many other startups currently seeking capital, the company does have healthy revenue figures — $1.59 million last year — to back it up. However, the lack of discount is not particularly attractive for investors. Thus, the price score for PersonalRX is just slightly above average.

The pharmaceutical and drug store market is valued at $319.3 billion globally and is expected to increase 3.3% in 2021. The online pharmacy market is expected to reach revenues of $131 billion by 2025, which may be more in line with the total addressable market of PersonalRX. The COVID-19 pandemic has accelerated the adoption of delivery services with noted increases in various delivery industries (most notably, DoorDash recently completed its IPO at a lofty valuation), so PersonalRX is in the right industry at the right time. Its market score is quite high in reflection of these factors.

The founder and CEO of PersonalRX is Lawrence Margolis. A former Wall Street broker, he specialized in the health and technology spaces while working in finance. Margolis is joined by the president and COO Charles Oestricher, who brings industry experience to the team. Oestreicher previously worked at CVS Health, Express Scripts, and Medco Health Services. His experience working within this industry, coupled with Margolis’s business knowledge does make for a solid executive team. However, the founder’s dedication to the company could be called into question. Margolis also acts as the CEO of Health Tech Harbor, Inc. alongside his work with PersonalRX.

Margolis and Oestreicher are joined by CTO Vaibhav Khullar, who has previously held senior and executive roles at Barclays and Credit Suisse. Lastly, there is Director of Pharmacy Operations Gillian Giannone, who has worked as a clinical pharmacist at Express Scripts and a staff pharmacist at Geriscript Pharmacy.

With its mix of financial know-how and industry experience, the PersonalRX team is decent. However, Margolis’s lack of full-time dedication to the company is somewhat concerning. Thus, the team score for PersonalRX is slightly above average.

PersonalRX’s biggest appeal is given away in its name — personal touch. The company offers pharmacists available around the clock, and it fully packages and sorts deliveries for customers with no added cost. Customers are given the direct phone numbers of the pharmacy technicians working on their orders. As a result, consumers are given insight into the process and a direct line of communication with someone inside the company. PersonalRX’s RX2 mobile app also allows customers to have visibility over the entire process while also enabling the company itself to oversee end-to-end workflow, improving on the system wherever possible.

However, PersonalRX faces major competition in the online pharmacy market. Massive, publicly traded companies stand in PersonalRX’s way to mainstream success. CVS, Walgreens, and Cigna make up 53.7% of the market share within the prescription drug market, and other big-name companies like Kroger, Walmart, and UnitedHealth Group push that number close to 65%. However, none of these name brand competitors offer the personalized experience that PersonalRX emphasizes for its customers. Therefore, the company’s differentiators score is its highest across all five metrics.

PersonalRX’s traction thus far has been solid. The company has existing partnerships with companies specializing in pharmacy benefits management, home healthcare, and digital lead generation. This will allow PersonalRX to scale its business at a faster rate.

Financially, PersonalRX also has some traction. The company saw $1.5 million in revenue in the most recent fiscal year, although this was paired with a -$2.8 million net income. PersonalRX also has a large amount of debt, with just over $10 million in short-term debt and around $304,000 in long term. Given the company’s status as not profitable and its high monthly burn rate (around $233,000), this debt situation looks worrisome. However, the company just sold its 10 millionth pill package this year, showing that it does have existing and repeating customers. Balancing its healthy revenue against major debt and a high burn rate, the performance score for PersonalRX is middling.

While the space itself may be growing, so are the competitors. PersonalRX is trying to make a name for itself in an industry that already has many companies with names known far and wide, including CVS, Cigna, Walgreens, Kroger, Walmart, and even Amazon. If any of these companies pivots to offering services similar to PersonalRX, it could struggle to attract consumer attention. Pairing this with an already high valuation, PersonalRX will need to overcome quite a lot in order to be a profitable investment.

PersonalRX is completely up and running, with 10 million pill packages sold and $26 million dollars in revenue throughout the company’s existence. The early traction shows that the company is on the right path towards success. It is working with a digital lead generation company to capitalize on marketing opportunities and gain new customers. The executive team is strong with solid insider experience and has a signed partnership with a Fortune 500 pharmacy benefits management company as well. The industry as a whole is growing, increasingly so in the midst of the pandemic, which means there is more demand than ever. PersonalRX may very well capitalize on its growing success and earn a significant market share.

The drug prescription delivery industry has been catapulted into the mainstream in 2020 and 2021 due to the pandemic. PersonalRX looks to capitalize on this increased market share and offers a personalized pharmaceutical experience. It signed partnerships that indicate future growth opportunities and has a solid executive team at the helm. However, for a decade-old company, itst financials look shaky. On top of that, it exists in a highly competitive industry with many recognizable names already occupying a massive share of the market. Altogether, PersonalRX is a Neutral Deal at this time.

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Analysis written by Ethan Thomas.