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Capsule Business Model: A comprehensive look

By Abhishek Goel 10th May 2022

In case you have grumbled about having to wait in long queues at the pharmacy stores, there is a company out there that will save you the trouble. It is called Capsule. Let’s take a closer look at the Capsule business model in this article.

The New York-based start-up began operations in 2016 and offered to deliver prescribed medicine directly to your doorstep or in your office at the time of your choice. Eric Kinariwala leads the Capsule business model.

He began working on the idea after a horrible experience at one of the pharmacies. He pulled one of his long-time friends and pharmacist Sonia Patel on board to develop a team of pharmacists. This is the way the pharmacy start-up Capsule was created.

Capsule CEO

How does Capsule’s business model work?

After you have visited a doctor who has prescribed a medicine, you can ask the person to fill out the prescription using the Capsule pharmacy rather than the usual Walgreens or Duane Reade. Capsule has tied with all the electronic medical systems of different physicians.

Therefore, this should not be too much trouble for the doctor. Now, you have to go online and log on to the Capsule account. You may do this either on iOS or from the internet. Here you will have to designate a time and place of delivery where you wish to have the medicine dropped off.

The capsule has developed its digital pharmacy ground up in the Flat Iron district of Manhattan. Therefore, there isn’t any third-party pharmacy you will be required to deal with doing the medicine. Capsule understands the significance of a pharmacy. And it doesn’t matter whether you are dealing with prescribed medicine or not.

You can ask for medicine for a red and sore eye or some allergic reaction as well. For all these requirements, Capsule has a 24-hour live chat service. This service operates in the form of a chat, email, and SMS. 

If the solution for your requirement is one of the over-the-counter products, they can also hook you up with another delivery. In case they are not carrying what you require, you can get assistance from one of the certified and trained pharmacists from Capsule and handle the problem yourself. There are no additional charges for using Capsule or getting the medicine delivered in New York. Rather the company uses a conventional pharmacy model.

Keep in mind that most pharmacies invest their earnings back into the store. They start selling things such as cigarettes, magazines, and candy. While Capsule invests its profits into services such as delivery and chats rather than turning the pharmacy into a retail location.

Capsule Online Pharmacy

Capsule funding

The online pharmacy in one of its recent drives raised $300 million. This took the company’s valuation to more than a billion dollars for the first time. This was in 2021. The capsule is trying to utilize these funds for expanding to newer markets and investing in new technology.

From their initial business model, the company has expanded beyond prescriptions via their app connecting people with their health offerings. You can now associate the Capsule business model with mental health services and telemedicine. 

The capsule has gradually grown from its original New York City base into other several markets such as Los Angeles, Chicago, and Minneapolis. Capsule will utilize some of its proceeds from the fund-raising for expanding into newer sectors. They were planning to connect with more than 100 million people soon. Since its inception in 2015 Capsule has raised in the excess of $570 million. Although Kinariwala declined to specify the exact amount, it is estimated that the company has assets of more than 1 billion USD.

A crowded segment

The pharmacy industry operating in the U.S. is a crowded space. The drug dispensing revenues from prescriptions touched a whopping figure of $465 billion last year. This has attracted the attention of many start-ups and big companies. The relative newcomers such as Capsule are trying to target new customers that are not willing to visit a pharmacy in person.

Many other large organizations such as CVS Health Corp and Walgreens Boots Alliance are introducing different perks such as free delivery for attracting and keeping customers. The e-commerce giant Amazon is developing its online healthcare business and this is expected to disrupt the other competitors in many areas.

Pharmacy is a gigantic industry as indicated by one of the partners at Thrive. Thrive has invested in all the rounds of funding requests from Capsule. The basic idea is to offer a great solution to the clientele. These investors believe that Capsule has the cutting edge to deliver this promise.

Capsule is trying to develop a single place where the customers can go for their healthcare requirements. It doesn’t matter if some of them are coming from other platforms. It is like iPhone which can support apps from companies other than Apple. For instance, a company called Ginger partners with Capsule for fulfilling mental health patients’ prescriptions.

How Capsule's Online Pharmacy Is Riding

The key to the capsule business model

The Capsule CEO Eric Kinariwala believes that the company can utilize personalization and e-commerce for developing better health outcomes. Capsule doesn’t charge its customers more than the cost of the medicine. These prescription prices are set, by various insurance companies. However, the company takes advantage of not having a physical real estate.

All the expenses that come with having a physical pharmacy make it impossible for them to offer what Capsule can. The other difference is the value you can develop around the services provided. A greater level of attention and care makes a difference. 

It is a well-known fact that most drugstores have a place in the back to hold private conversations to answer sensitive questions. Capsule says that the customers are 6 times more likely to talk to a pharmacist by using text messages. This is because they feel comfortable with this mode of communication. Capsule has Sonia Patel who was a pharmacist before joining Kinariwala. There are a couple of ways to ensure that people are taking their medicine.

Make things easy and get a partner involved. Capsule always follows up with their customers to ensure that they have refills in their stocks. Capsule also keeps the doctors, patients, and pharma companies in sync. The pharmacies are the front lines of health and they develop trust via interactions. They share this data with their partners in the ecosystem.


The direct and quirky brand voice of Capsule seems to be appealing to the younger generation. Or, is it trying to target the millennials? But the pharmacy doesn’t have plans to cater just to the young generation. It is available for all those that need healthcare. The platform works well for everyone including hospitals, doctors, consumers, manufacturers, and insurance companies. The online pharmacy is keen on building trusting relationships with people that utilize its services and it doesn’t matter how old they are.


One of the organization’s top value propositions is convenience. The company has set new standards about how people will interact with the healthcare facilities by using intuitive technology and a straightforward design. The company has designed its features to benefit everybody and especially those seeking the convenience of regular medicine access. Everybody has the right to be taken care of and this spirit is visible in the brand.


Keep in mind that the best brands out there are externally and internally well-aligned. When you are building a brand, it is significant to ask what values the company stands for. The Capsule brand offers a level of care and trust that can rarely be seen in the healthcare sector. The company has created business model innovations that speak to all the concerned parties in the ecosystem.

The goal is to reconnect medications with healthcare and communicate with the customers. If you are looking to develop an online platform for your online pharmacy, get in touch with the professionals at Jungleworks for a great experience.

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