# Alto Pharmacy Financial Model Alto Pharmacy is a tech-enabled, same-day prescription delivery pharmacy disrupting the $450B US pharmacy market via a direct-to-patient courier model and provider-facing software platform. - Canonical: https://finamodel.com/startups/alto-pharmacy - Excel download: https://finamodel.com/startup-models/alto-pharmacy.xlsx - Category: Biotech/Pharma - Model type: SaaS ARR / Valuation - Funding round: Series A - Funding: $6M - Founded: 2016 - Geography: United States. Live in 11 cities as of deck date (SF Bay Area, LA, Seattle, Denver, Las Vegas, New York, Dallas, Houston, San Diego, Long Island; Austin coming soon). Licensed in 48 states. Expected to cover ~20% of US lives by YE21 [DECK slide 16]. - Customer: B2C ## About the company Alto Pharmacy combines same-day prescription delivery with a patient app, AltoMD provider portal, and its proprietary Wunderbar pharmacy operating system. Patients can manage fills, checkout, delivery, messaging, reminders, and refills, while providers track prescription status, authorisations, and adherence. Current revenue comes from prescription dispensing: Alto bills insurers and collects patient copays. Provider workflows drive prescription volume, with refill enrolment supporting recurring scripts. Future opportunities include Alto Plus membership, OTC products, telemedicine, population health, and payer partnerships, but reimbursement rates and subscription prices are not disclosed. Alto operated in 11 cities and held licences in 48 states, with ARR redacted but year-over-year growth above 100%. It reports an NPS above 85 for over four years and a 100-plus-person technology team. The model should build scripts, reimbursement, copays, delivery, margin, provider acquisition, and working capital. ## What's included - 5-year monthly revenue build with stage-appropriate growth assumptions - Full P&L, headcount plan, and operating-expense schedule - Cash-flow statement, runway, and burn-rate tracking - Valuation via exit multiple with a DCF cross-check - Returns analysis with MOIC and IRR - Unit economics including CAC, LTV, payback, and cohort retention ## Product & value proposition - **Alto App**: Mobile-first patient self-service - order fill, cart checkout, delivery tracking, medication adherence reminders, in-app messaging, automated refill enrollment. - **AltoMD**: Web-based provider portal - real-time Rx status tracking, prior authorization management, patient adherence visibility, instant messaging with Alto care team. Claimed to eliminate 20+ hours/week of back-office time. - **Wunderbar Platform**: Proprietary in-house pharmacy operating system covering care operations, supply chain, third-party integrations, and data infrastructure. 5+ years of development, 100+ engineers, 200+ releases/month, 2M+ lines of code. - **Delivery model**: Same-day courier delivery; centralized Rx processing; hub-and-spoke geo expansion. - **Revenue streams (current)**: Prescription dispensing (insurance reimbursement + patient copay). **Expansion roadmap**: Alto Plus subscription (~$13B TAM), OTC/vitamins/supplements (~$65B TAM), telemedicine (~$250B TAM), population health / data services (~$24B TAM). ## Market - Pharmacy TAM: $450B, confirmed on slide 18. - Only 1% of pharmacy is currently online vs. 70% for ride-hailing, 52% for food delivery, 65% for travel. - Combined expansion TAM (prescriptions + subscription + OTC + telemedicine + population health): ~$800B. - 90% of scripts still picked up at retail; 33% of scripts never picked up; -5 NPS at largest US pharmacy (CVS); US is #1 country in drug spend per capita; ~$100B in medical waste tied to non-adherence. - ~140M Americans fill ~5.8B 30-day Rx/year; 20–30% of prescriptions written are never filled; ~$300B cost from non-adherence. ## Revenue model - **Primary**: Pharmacy dispensing - Alto bills insurance (PBM reimbursement) and collects patient copays. Revenue recognized per prescription filled and delivered. - **Channel**: Provider-driven GTM (AltoMD drives Rx flow from physicians → Alto); patient self-service via app; refill-enrollment auto-fills recurring scripts. - **Pricing**: No extra cost to patients stated on website; pricing transparency / coupon optimization is a product feature. Insurance accepted. - **Expansion revenue**: Alto Plus subscription membership (price not disclosed), OTC add-ons (increases AOV), telemedicine consult fees, population health / data licensing. - **B2B angle**: Focus on enterprise customers and health plan / payor partnerships (Medicare Part D, assisted-living, employer plans). - Exact pricing (per-delivery fee, subscription price, reimbursement rates) not disclosed in deck. ## Traction & metrics - ARR: $XM (exact figure redacted) - YoY growth: >100% - Contribution margin: Positive (+$X per order); up from -$X in 2019; on track for +$X by 2023 - specific dollar amounts redacted - NPS: 90 (described as "90+" on slide 18); sustained >85 for more than 4 years with weekly sample >1,000 - Cities live: 11 as of deck date - States licensed: 48 - Revenue growth chart: Consistent quarterly growth from Q3 2016 through Q4 2021; strong acceleration visible in 2020–2021; Q4 2021 is the highest bar, roughly 2–3x Q4 2020 - Technology team headcount: 100+ - Codebase: 2M+ lines; 200+ releases/month ## Unit economics - Contribution margin: Positive as of deck date; was negative in 2019; target +$X by 2023 - exact figures redacted. ## Competition / moat **Competitive set identified**: - Traditional retail: CVS, Walgreens, Rite Aid, Walmart+ - Digital / tech challengers: Amazon Pharmacy, GoodRx, Hims - Alto is positioned as highest on both Technology axis and Pharmacy-focus axis vs. all named competitors. **Stated moats**: - Proprietary Wunderbar platform (5+ years, 2M+ LOC) - hard to replicate - AltoMD provider stickiness - workflow integration drives Rx flow lock-in - Refill enrollment creates recurring, predictable demand - NPS of 90+ sustained >4 years - strong patient retention signal - Regulatory technology backbone; licensed in 48 states - Aligns full healthcare ecosystem: patient, provider, pharma, payor ## Team & funding ask / use of funds - Note: Deck is labeled "CONFIDENTIAL" and is divided into Business Overview, Commercial & Growth Strategy, and Operations Overview sections - suggests a Series C/D institutional raise context given scale (11 cities, 100+ tech team, multi-year ARR trajectory), but round details are absent. --- ## Recommended financial model - **Archetype + why**: **DTC / Healthcare Services Revenue Model with Unit-Economics Waterfall** - specifically a pharmacy dispensing P&L built around scripts filled per market, insurance reimbursement rates, and per-order contribution margin progression. Alto's primary revenue is prescription volume (scripts × avg reimbursement per script, net of drug COGS), not SaaS ARR, though ARR is used as a proxy revenue metric internally. The provider-GTM flywheel makes this a volume/cohort model by city launch year. - **Forecast horizon & granularity**: 5 years (2022–2026), quarterly for years 1–2, annual for years 3–5. City cohort build-up is the natural unit of granularity given the hub-and-spoke expansion model. - **Key drivers & assumptions**: - Scripts per active patient per month: ~3–4 scripts/month based on chronic medication adherence norms; refill-enrollment patients likely higher - Average reimbursement per script: ~$80–$120 blended (commercial insurance mix); specialty scripts materially higher - Drug COGS as % of revenue: ~75–82% (pharmacy industry norm; PBM spread narrows this) - Gross margin per script: ~18–25% - Contribution margin trajectory: Negative in 2019 → positive at deck date → target +$X by 2023; model should show margin/order improving as delivery cost is leveraged over volume - Delivery cost per order: ~$8–$15 blended (courier + logistics overhead), declining with density - Active patients per city at maturity: 10,000–30,000 (based on city population sizes and 1% online penetration starting point) - City launch cadence: 5 cities live pre-2021, 5 more in 2021; 3–5 new cities/year 2022–2024 - Revenue growth: >100% YoY at deck date; decelerates to ~60% in 2022, ~40% in 2023, ~25% in 2024 as base grows - Alto Plus subscription: launch 2022; ~5–10% patient attach rate; ~$10/month fee - OTC / telemedicine revenue: immaterial in near term (<5% of revenue through 2024) - Headcount / OpEx: 100+ tech team at deck date; sales force expansion tied to new market launches; G&A scales sub-linearly - **Scenarios (Base / Bull / Bear - which variables flex)**: - Base: >100% → 60% → 40% → 25% revenue CAGR; contribution margin reaches +$8/order by 2023; 3–4 new cities/year - Bull: Faster market penetration; Alto Plus scales to 15%+ attach; pharma / payor B2B deals accelerate; margin improves faster from volume leverage - Bear: PBM reimbursement compression; delivery cost inflation; slower city ramp; competitor (Amazon Pharmacy) gains share; regulatory headwinds on refill-enrollment - **Required sheets / outputs**: 1. **Assumptions** - all drivers in one place (reimbursement rate, COGS%, delivery cost, patient ramp by city, headcount ratios) 2. **City Cohort Build** - scripts/patients per city by launch year, ramp curve, mature-state throughput 3. **Revenue & Gross Profit** - scripts × reimbursement, less drug COGS; by segment (Rx, subscription, OTC, telemedicine) 4. **Contribution Margin Waterfall** - gross profit less delivery cost, less variable customer support = contribution per order 5. **OpEx Schedule** - S&M (sales force per new market), R&D (tech team), G&A 6. **P&L (Income Statement)** - revenue → gross profit → contribution → EBITDA 7. **Headcount Plan** - tech (100+ base), ops, sales, G&A 8. **Cash / Runway** - uses of capital by bucket (city launch capex, working capital for drug inventory, headcount) 9. **Scenario toggle** - Base / Bull / Bear on key levers 10. **KPI Dashboard** - ARR, scripts filled, active patients, cities live, NPS, contribution margin/order ## Frequently asked questions ### Is the Alto Pharmacy financial model free? Yes. The Alto Pharmacy model is a free Excel download with live formulas. ### Can I change the assumptions? Yes. The workbook is editable and its live formulas recalculate when assumptions change.