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Healthcare Meets FinTech | Chris George @ Qube Health
161 Plays3 years ago
It’s 2022! By now, everyone knows that FinTech has taken India by storm and fascinating things will happen when such disruptive technology finds its applications in other sectors.
In this edition of Founder Thesis, Akshay Datt speaks with Chris George, Co-founder and CEO, Qube Health.
A serial entrepreneur and an alumnus of NYU’s Stern School of Business, Chris started his entrepreneurial journey at the young age of sixteen. He briefly worked in the USA and came back to India to start his venture, something which he describes as his ‘Swades moment’. Through his personal experiences, Chris identified the gap between healthcare expenses and what all insurance pays for! He started Qube Health in 2019, which aims to aggregate FinTech and Healthcare to streamline employee healthcare management by providing primary care, health screening and other non-insurance healthcare services through a single platform.
Tune in to this episode to hear Chris talk about how Qube Health is simplifying and changing the way people pay for their healthcare in India.
What you must not miss!
- Chris’ entrepreneurial journey
- His experience of working in the USA
- Qube Health’s fundraising journey and subsequent plans for expansion.
Recommended
Transcript
Introduction to Hosts and Podcast
00:00:00
Speaker
Take a minute to enjoy this interview. Hi, I'm Akshay. Hi, this is Aurabh. And you are listening to the Founder Thesis Podcast. We meet some of the most celebrated sort of founders in the country. And we want to learn how to build a unicorn.
Meet Chris George: Co-founder and CEO of Cube Health
00:00:28
Speaker
Hi, my name is Chris George. I'm the co-founder and CEO for Cube Health. I've said this a bunch of times. The last decade was software is eating the world. I think this decade is going to be fintech is eating software. And there are fintech approaches towards solving a variety of problems, essentially where the software part of it is just enabling the fintech to happen better.
Early Ventures and the Birth of Cube Health
00:00:55
Speaker
and a great founder I'm speaking to today who is building fintech for healthcare is Chris George. Chris has had a fascinating journey from starting up his very first venture when he was just 16 years old and I mean I don't even remember if I knew what is business when I was 16
00:01:14
Speaker
after a bunch of successful ventures today he's running cube health cube health is essentially a fintech full stack platform for health care cube health helps companies to manage their health programs be it insurance be it a regular executive checkup or any other kind of
00:01:33
Speaker
health and welfare programs for employees. And by acquiring companies, Cube Health builds relationships with employees and allows those employees to get access to a buy now, pay later or credit for their health expenses which are not covered by insurance. Therefore, allowing them to stay out of poverty in case of sudden, unforeseen health issues in the family.
00:01:57
Speaker
I am super inspired by what Chris is building and here's my conversation with him starting when he was 16 years old. I enrolled for my first year BSc in physics.
00:02:09
Speaker
Interestingly enough, that was my epiphany. You can see my first epiphany in life. I've had quite a few. While I was pursuing that, my dad used to give me some very meager pocket money. I think for an entire month, I think I had 500 rupees or something, which I thought was amazing. But I was like, for 500 rupees, nothing is going to happen.
00:02:34
Speaker
Me and a couple of friends who were enterprising got together and said, maybe we should organize some sort of a mini college festival or something like that for some extra pocket money. That first event we did was a bit of a fashion show with some band and all of that kind of thing, a small scale event.
00:02:53
Speaker
each of us netted about and you had like a ticket price on it like how did you make money on it we basically went to thumbs up and got them to sponsor and you know things like that sold tickets literally going college to college into everyone and you know each of us netted 3000 rupees you know out of that event which i thought was just like incredible right
00:03:18
Speaker
And it was like, oh my god, this is so good. You get money, you get recognition, and all kinds of things like that. So that actually was my first step towards entrepreneurship. I was 16 years old, and we incorporated a company in the event management space. So that was the start.
00:03:42
Speaker
Actually, from there, that business, over the following year and a half, did some of the more visible college festivals in Bombay. So, IIT Bombay is... Like, you would pitch to a college that, why don't you start a festival and we'll take care of the logistics, the sponsorship and the ticket sales, we'll do everything. Yes, I mean, the college has already had a festival, so we'd pitch saying that, give us the production.
00:04:11
Speaker
Right? So Bombay has a girls college called the Safai. This is like a fixed fee, so you would earn on ticket sales. On ticket sales, we earn on sponsorship, all kinds of things.
00:04:23
Speaker
Wherever we could. Bombay has Safaya College, so they have a festival called Kaleidoscope, so we did the production for that. IIT Bombay has a rock event called Mood Indigo, so we did some stuff for that. We ended up partnering with some larger event management companies like Viscraft and TM. This is Vityas?
00:04:48
Speaker
quite some time back. But I'll give you a time marker. We actually did backstage production for Bon Jovi when he came to India and Bryan Adams when he came to India.
00:05:04
Speaker
It was a glorious time. We had a great time. You must have been making like 40-50 lakhs a year or something from that. The organization. I'm sure it was not that much, but it was very good. We thought we were rich. But to be honest, more than the money, and I think we were still figuring out one of the fundamentals of business, which is how do you price your business? How do you price yourselves?
00:05:34
Speaker
At that point in time, we were just taken away by the glamour. We were popular. People knew us. We'd go to different colleges and people knew who we were. And that was kind of fueling everything. So that kind of drove a lot. But more importantly,
00:05:51
Speaker
It taught us ground skills. How do you print a poster? How do you design a poster? How do you go sticker it up? How do you sell ticket sales? Dealing with the police, the permissions, actual hardcore. I truly believe even today that event management is one of the most difficult businesses that is out there.
00:06:12
Speaker
Yeah, absolutely. You need to be an extremely efficient multitasker to pull off a new one. Absolutely. So hats off to anybody who's in that business across the board. We tried to graduate onto doing a bit of artist management. So we signed up a few local bands and signed them up for gigs and stuff like that. So it was cool. It was good. I mean, those 18 months was actually
00:06:41
Speaker
fantastic, fantastic time for us. There were about four of us that were very closely involved. Why did it end? Like why only 18 months?
Education and Work Experience in the US
00:06:53
Speaker
Yeah, so that's actually my second epiphany in life. So one of the friends from that group actually passed away, met with an accident and passed away.
00:07:04
Speaker
He had a motorcycle accident and went through stuff. I started questioning. By this time, I was ending my first year BSc Physics and I started questioning life.
00:07:16
Speaker
I went back to my father and I said, you know, I really don't know, you know, what the hell am I doing with this DSC physics education? I mean, I really like it, but as a subject, but the kind of stuff I'm learning, you know, I don't see the practical use of it, etc. And my dad said that, you know, have you really thought about business because you haven't taken pocket money from me for like a year and a half now.
00:07:39
Speaker
You guys seem to be doing a bunch of things. And culturally, at that time, you may recall, it was like, if you're a science student, if you downgrade to economics or commerce. So my mom was like, oh my god, people are going to think you flunked or something like that.
00:08:00
Speaker
So I said, well, you know, I really need to think. And that's when I said, OK, well, can I go for a business course? And of course, the IMS and all go there, but I couldn't get in there at that time. So I should let me think about abroad.
00:08:14
Speaker
So I found out that the Bachelors in Business Administration course existed abroad and I told my dad that should I apply. My dad said, listen, I'll give you money for application fees. I'll give you money for the first semester if you're able to get through. Then the rest is on you.
00:08:32
Speaker
So and this is this is at a time when the United States Education Foundation in India used to have a center. So students could go and do research in something known as Patterson died and stuff like that. Right. So so I did that along with another body of mine. And lo and behold, I managed to get through for my bachelor's in business administration in Texas. They agreed
00:08:57
Speaker
to transfer my credits from the first year BSc Physics. So it was not like a based or a drop year or anything of that sort. And they said, okay, great, come on over. And I was like, what? Wow, I managed to get through. So yeah, so that was and then begins the second part of my journey. So like, what was it like, you know, landing in Texas? And I mean, Texas is like, not very multicultural, right? I mean, it's like, I have what we've heard.
00:09:28
Speaker
At least then, and the big cities have now gotten a lot more. I mean, Houston, Dallas, and San Antonio are a lot more multicultural now. A lot of daisies there for sure, especially in Houston and Dallas. It was bizarre, actually. Here I am, 17 and a half, along with this other school friend of mine, both of us had applied together. We managed to get through.
00:09:53
Speaker
The other side of Texas is that they're extremely polite and courteous. We were walking to the bus stop and random people, if they met your eye, they'd say, hey, how's it going? We used to not respond. I used to tell my friend, does he know you? He's like, how is he going to know me? I just arrived with you. How will he know me?
00:10:22
Speaker
And then eventually we figured out, you know, it was just polite conversation. So, so, so interesting things like that, or the fact that you, uh, you know, unless you're in downtown main city, you cannot raise your hand and just stop a cab. You have to actually call a cab. And, and we went around and we were like, there's no taxes here, man. Like how the hell do we do it? Et cetera, et cetera. Uh, but like I said, my dad agreed to pay for the first semester, which meant that.
00:10:50
Speaker
I had to find a job in a rush. I ended up getting my first quote unquote job job in a petrol pump or a gas station over there, which was run by a Pakistani gentleman. It was a petrol pump and a convenience store in itself.
00:11:14
Speaker
I still remember him got me a lot actually and my job was to of course manage the store and he explained to me everything from inventory management stocking cash management you know managing the inventory of the of the patrol and diesel that used to sell and so on and so forth i had to switch to buses before i reach that particular location after university in the morning i used to go to college and then afternoon i used to go there and work till late in the night because you used to get paid
00:11:41
Speaker
little above minimum wage by the hour. What I didn't realize is that that particular gas station happened to be in one of the most notorious neighborhoods in the city.
00:11:53
Speaker
which had a lot of gangland riders actually. You're 18 or so or whatever. One night when I was walking back from there to the bus stop, you see in the rap videos, you have these low rider cars that go bouncing like this with the loud music playing. It was unique to me. I'm walking on the side of the road and then this boom, boom, boom stuff comes in.
00:12:22
Speaker
And I look over because I was just curious. And of course, these bunch of guys, young kids, I mean, I mean, I was young and they were younger, got out and they were like, what the hell are you looking at? And I was like, oh my God. And clearly they looked like they wanted to pick a fight, right? So they basically got out and I was like, nothing, nothing, nothing, and whatever. I don't know what do you mean, nothing, et cetera. It seemed like a scene out of Goodfellas or something like that.
00:12:50
Speaker
And this guy actually lifted his t-shirt and he had a Uzi submachine gun or at least something that looked like that. I was like, listen, it's OK. But here's the interesting story. Those guys would regularly come to the gas station to fill gas. And they eventually became friends because of an interesting thing.
00:13:12
Speaker
So our store used to sell, along with regular cigarettes and other stuff like that, BDs, the Indian BDs.
00:13:22
Speaker
Right? And my boss had a great idea where he'd buy the BD pack, which is like, I don't know what's the price of BD now, but I mean, that time I think it was like a dollar or something like that. And you have like 20 leaf rolled, a nice tobacco bit, which is, you know, all legal and stuff. And he would sell each BD for a dollar. Right? So I mean, he was claiming the margin on this.
00:13:45
Speaker
And these boys would sell it to them by saying that, listen, this is legal tobacco, so it looks like an illegal substance. Yeah, it looks like a joint. It looks like a joint. But in case you get caught, it's not going to show up because it's totally legal. And they used to love this, right? So they used to come to buy this, and I'd give them a couple of BDs for free.
00:14:12
Speaker
So these guys, that original gang of gangsters, the local hoods, they all became friends because I spoke to my boss and I used to occasionally give BDs and a couple of beer cans. And they became quote, unquote, my protectors. So that was a, that was an interesting, interesting experience. How long did you work in that petrol station?
00:14:33
Speaker
Oh, wow. Throughout my undergrad, from Mr. Diaz's place, I moved to another Patel store, Mr. Bipin Patel, who was a local entrepreneur. He had three gas stations. He had like two motels and stuff.
00:14:48
Speaker
I graduated to managing all five of those properties for Bipin. While you were still studying. While I was still studying. While I was studying in the store because that's the only time I could get homework done. Great experience. Great experience. Learned inventory management, dealing with people, dealing with customers, multitasking.
00:15:13
Speaker
Running a business, basically. Running a business, right? I mean, understanding the different types of people, the profiles, how do you literally... I mean, all of it, all of it. It was a great experience. So, which year did you pass out?
00:15:29
Speaker
So, this was in the 90s, in the mid-90s. From there, I moved to New York to do my master's at NYU. So, I did my MBA and I moved to New York at a time when
00:15:48
Speaker
what is now actually a very hip neighborhood called the Meat Packing District. It was actually the Meat Packing District and I lived in Brooklyn. I considered New York still my second home after Bombay because my formative years actually was there and did my master's and straight out of master's. And were you not easy to get into, right? Yes.
00:16:13
Speaker
What do you think helped you? Wasn't this experience of... Most definitely. Most definitely. This experience in itself... Because they don't look so much at an academic score, right? As much as the... That's correct. And, you know, I understood that as well. You know, eventually I did some summer working with the admissions office. So, you know, the kind of... They used to look for personalities, right? I mean, you needed to have a story.
00:16:40
Speaker
So, it was great and it's a fantastic university and especially Stone School of Business and stuff like that. It was a great thing. So, I did that. I again continued to work in parallel, a bunch of things. Straight out of campus, I ended up joining a telecom company called Sprint Telecom.
00:17:04
Speaker
I was part of the team that launched. Was it Southpango and Den? No, it was independent.
00:17:11
Speaker
Basically, there was AT&T, Sprint, and WorldCom. Those were the three top three telecom companies at that time. So basically, I ended up joining Sprint Telecom. I was part of the team that launched their cellular service division called Sprint PCS on the East Coast. My professor recommended and I ended up getting a great job. Fantastic experience. I helped set up a 500-seat call center for them.
00:17:38
Speaker
things like that. This was in the early days of the call center. I still remember WorldCom and a couple of these companies. There was a company called Global Crossing that was laying the fiber optic cables that eventually became the foundation for outsourcing of call centers to places like India and Philippines.
00:17:56
Speaker
And we used to talk about how setting up a find-it-seat call center in New York is so expensive, even though we chose the real outskirts of New York City. And then people said that eventually you can actually move to somewhere else, which is what happened. So did that. And for a brief bit, about a year or so, and then kind of moved to Bell Atlantic, another telecom company now called Verizon.
00:18:21
Speaker
Um, uh, uh, you know, so, uh, uh, and moved there to head, uh, what's known as value added services or pass. Um, basically it's just a fancy way of saying that, you know, you have to sell shit, like, uh, call waiting and conference calls and all of that to people. So, so did that. Customized ringtones and stuff like that. So, so did that. And, um, third epiphany in life, uh, ended up coming to India.
00:18:50
Speaker
in the year coming back to India with a Shahrukh Khan moment from Swades. Thinking that, boss, there's something happening in India, gotta go back. That was actually in the year 2000. Was it actually after watching Swadesh? No, no, no. I mean, I didn't think Swadesh. It was just a feeling.
00:19:14
Speaker
So I was like, gotta go and see what's happening.
Returning to India: Founding Easy Buy Music
00:19:18
Speaker
So that's what happened and I came back to India. Okay, then.
00:19:23
Speaker
Well, I came back and I reached out to my buddies, so three of the four founders were doing different things. I met up with them. One of them happened to be working for Sony Music. And Sony Music was doing some amazing things, from Lucky Ali's Suno album that came out on the indie record side, which did
00:19:47
Speaker
fantastically well with Osanam and things like that, to launching everything from Michael Jackson to various other Ricky Martin and Jennifer Lopez and stuff. So he was selling CDs and cassettes and he was on the sales side and he said, Chris, we were talking about bands, talking about businesses and events and all of that. He said, the music industry is the only industry, at least at that time, where distribution is a competitive advantage in India.
00:20:17
Speaker
Everywhere else, let's say if you have Michael Jackson signed to your record label or let's say Justin Bieber, then you will make a lot of money because Justin Bieber will sell a lot. But in India, if your CDs and cassettes don't reach the store, it doesn't matter if you have Justin Bieber because you will never make money.
00:20:35
Speaker
I was coming from the US and stuff and Amazon had started building its business. I was like, that's crazy. Why don't we just do a mail order business? Of course, I had read about how Virgin started its mail order business and all of that kind of stuff. I said, we should consider
00:20:52
Speaker
We said, maybe I should consider doing this. That actually helped create my first venture after coming back. The company was called Easy Buy Music, essentially selling CDs and cassettes online. It eventually became Easy Buy Store, which is probably one of the early versions of Flipkart.
00:21:14
Speaker
They were basically just pretty much two or three dot-com e-commerce companies between the years 2001 till 2004. We were what is known as a hybrid, meaning you could call on the telephone and order some stuff from CDs, cassettes to books to video games and whatnot.
00:21:34
Speaker
You had a call center also, that experience of call center would have helped here. Exactly. That's exactly what happened. Actually, I think we were India's second or third company that got the toll-free number that they had launched.
00:21:49
Speaker
How did you find all this? This would have needed upfront investment. Absolutely. Actually, my dad helped me out by giving me, I think, 75,000 rupees or 80,000 rupees. Just to pay for expenses. Mine and I, we went around to music companies. An interesting thing is the music industry in India or the film industry in India is a cartel. Either you're in the cartel or you're outside.
00:22:20
Speaker
It took me about a year to kind of get into that cartel, sign on all of the record labels. It's interesting that a lot of them are still friends even till this day. Because once you're in the circle, you're in the circle kind of stuff. And we started selling CDs and cassettes and all kinds of stuff and books across the country. But very soon, this concept called... Was there a payment gateway at that time?
00:22:46
Speaker
Cash on delivery. We went and built a cash on delivery model, worked with ICICI bank and first flight careers and things like that. It was a fascinating time. But almost within the first year itself, we got picked up by a consulting firm called Arthur Anderson, which used to be there.
00:23:35
Speaker
Right, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so, so,
00:23:37
Speaker
We actually ended up raising money from ICIC Adventures at that time in the year 2001 and raised a princely sum of $1.5 million at that time. It was spectacularly bizarre to me and especially my dad and his friends saying that someone's just giving you money. You guys are two people. What the hell? How are they doing this? How are they valuing the business and stuff like that?
00:24:05
Speaker
But that money actually helped us scale, set up. And in about nine months, we grew to about 160, 170 people across eight cities, built out a team and kind of scaled. We ended up actually being amongst the top five retailers online or offline for music products and stuff like that in the country.
00:24:29
Speaker
Road that wave till about 2004, which is when the dot-com crash happened. Everybody was shutting down, so I went back to the board and said, listen, what do you want me to do? We can still survive. We are making some money. Interestingly enough, what we had done was more than selling our own products. We built an e-commerce infrastructure that was powering some of the top 30 dot-coms in the country during that.
00:24:57
Speaker
So, between the year 2000 and 2004, if you went to Rediff, Sify, Chaitai, Bazi.com, the back end more than likely was powered by us. So, you buy there, but fulfillment was done by us. So, that kept us afloat. But I went to the board and said, listen, what do you want me to do? So, they said, look, I mean, we are taking a write down on all our investments if you want to shut down. We want this thing. So, I said, you know what? That's bad karma. So, if you're willing to be patient, I'll figure out something.
00:25:23
Speaker
They said, OK. And so I ended up euthanizing the business, you can say. So watered down from 178 people down to 35 people. Most gut wrenching experience ever, because you had to lay people off. You know, you had to kind of talk the talk on that side, et cetera. And we said, you know, what is it that we understand? You reached the stage because you were out of capital. Like we would have been out of capital in about six months.
00:25:52
Speaker
And this was 2004, right? And I think Flipkart started 2007. Of course, that particular board member and investor of that fund, a very powerful lady now and a very close friend in the private equity space, whenever we meet, she says, Chris, I think if you had just hung around for three, four years, I mean, you could have been Flipkart, right? I was like, yeah, but if you guys had invested, continued to put in money, then maybe that would have happened, right?
00:26:21
Speaker
But anyway, hindsight, right? So we had runway for about six months, but we knew eventually we'd run out of money. So I didn't want to kind of be there in that situation. So paid people off, gave them some severance of a couple of months and stuff like that, and said, let's go back to the drawing board. What is it that we understand?
00:26:37
Speaker
We said we understand internet, we understand technology, we understand consumers, and we said, okay, with all of those ingredients, what is the other industry that can use these skills?
Pivot to EBS Worldwide: Technology-Enabled Marketing
00:26:48
Speaker
And it turned out that marketing was becoming increasingly technology driven.
00:26:53
Speaker
People were like, I want to send out 1 million emails, I want to send out half a million SMSes, I want to track it all on a dashboard, etc. So we said, all right, so that's what we will do. So we ended up building a business in what we used to call then called technology-enabled marketing services, digital marketing or a new media company, whatever you may call it today.
00:27:15
Speaker
and basically said, okay, who needs these services? Who has these large volume transactions? So somebody said banks have a lot of money and they do a lot of transactions. So we went ahead and signed banks. So we went and signed HSBC bank, ICICA bank, et cetera, et cetera. Did a lot of work for them from everything from building the credit card rewards program to managing email campaigns, to building web banners and all of that.
00:27:44
Speaker
grew that business from that point. By 2007, we were back to being about 100 people and scaling back up. That business was called EBS worldwide. That's correct. Which is like Easy Buy Store. Just make an acronym out of the name and let's get business going.
00:28:10
Speaker
So we built that, and as it turned out, ILNFS Private Equity, part of ILNFS, came in and bought out ICICI Ventures, and they made money on that deal. So they were very grateful that their patience in us was kind of rewarded. And we scaled up significantly from there. So we ended up doing four global acquisitions. We grew organically, inorganically, bought two companies in the US, one in Europe, another one in Delhi.
00:28:39
Speaker
I literally pounded the pavement. We went and basically reached out to head of marketing and said, listen, digital is going to be big. They had some budgets, 10%, 20%. Now it's all together. There was above the line and below the line and all of those kinds of terminologies. We'd go and say, listen, we'll help you manage your below the line budget. A lot of these guys were learning on the fly. We were the cool guys who understood tech.
00:29:09
Speaker
Otherwise, they were dealing with the agency guys. What is the difference between above the line and below the line? Above the line was considered mainstream media such as newspapers, print, television, radio, outdoor. Broadly speaking, those were above the line and below the line was direct marketing, emails, website.
00:29:32
Speaker
Things like that, right? Now there is no line. Everything is what they call integrated advertising now, right? And of course, social media was just kind of building out at that time. So we did that in India and we grew on the back of a lot of these brands. I'd love to say that we did something extraordinary, but what happened was digital moved from being 10% of an advertiser's budget to being close to 100%, right? So we kind of held on to that and we grew with it.
00:30:02
Speaker
We did interesting things like we worked with HSBC credit card rewards program. When we started working with them, they just had 100,000 cards issued. By the time we stopped working, there were like 4 million cards that they had. We just had to kind of hold on.
00:30:22
Speaker
If you like to hear stories of founders, then we have tons of great stories from entrepreneurs who have built billion-dollar businesses. Just search for the Founder Thesis Podcast on any audio streaming app like Spotify, Ghana, Apple Podcasts and subscribe to the show.
00:30:44
Speaker
And why did you do global acquisitions? Was it to get clients from outside India? Yes, and also for the cost arbitrage. So the whole idea was, I'll give you a very simple economics. We were building websites in India for 5 lakh rupees at that time, which we thought was a lot of money.
00:31:01
Speaker
And we realized that in the US, in New Jersey, they were making the same website and they were charging 50 lakhs. So in our head, close to 100,000 at that time, in our head, we were like, boss, we'll just build a website in India and imagine the profit margins. Simple logic. So we raised capital to go and acquire companies over there, carve out technology, carve out design, carve out data processing, move offshore into India.
00:31:30
Speaker
and then expand it. Once we did that, we realized that across the river from New Jersey to New York, the same website was being sold for five crores because a million dollars is what they would charge. We thought that was insane.
00:31:46
Speaker
That's how we did this string of birds. Basically, we went and acquired these companies. EBS Worldwide became a holding company, very similar to like a WPP or a publicist, etc. The intent was to create a digital holding company of sorts with these local assets across the world, including India, and leveraging the India cost base. It had grown fairly rapidly at that point.
00:32:14
Speaker
2009 or so, 2008 or so, we were about 300 plus people, Fortune 1000 clients, there was a CEO for the Americas, CEO for Europe and stuff like that. What kind of top line? We were about 50, 60 pros or so. And this is net revenue, not advertising revenue, right? Because of the agency business. So this is net revenue. And then Lehman Brothers happened.
00:32:37
Speaker
So we were like, oh my god, there goes this entire thing. Capital is dry and all of that kind of thing. But it gave us an opportunity to actually focus on India, the India market, per se. And that's what we did. Scaled the business to about 400-something people, close to about 778 crores in top line. And then our board came back. By which year do you think? 2011. Yeah.
00:33:07
Speaker
And our board came back and said, listen, we must do a micro IPO in India. And let's try and use that to try and get some liquidity and so on and so forth. I wasn't really sure. What is a micro IPO? So like a small size, 100 crore, 150 crore, Indian rupee is kind of an IPO. But the process is the same as a regular IPO. Exactly.
00:33:34
Speaker
So I went through the song and dance for about a year, met with all the bulls, at least most of the major bulls, did the DRHBO, the draft red herring prospectus, appointed the eponymous Crawford billion company as a law firm to kind of do this and stuff like that. Went through the process for a year and I had my next epiphany in life. A couple of things were happening, right? So first is, I started thinking, is this something that I really want to do, run a public limited
00:34:04
Speaker
Because it's one of those tigers that you ride that you can't get off. If you run a public limited company and you're the promoter CEO of the company, you really can't sell those shares because if you sell the shares, the stock price will crash. You continue to keep building it. At this point, I was doing this for about more than a decade. I was like, okay, is this something I really want to do? In parallel, I was very involved with the startup community in it.
00:34:33
Speaker
I've been a founding charter member with the Thai, the Indus entrepreneurs, the organization. I was doing a lot of work with early entrepreneurs. I used to sit on the advisory board of IIT Bombay's incubator for about four years. I was like, what I really like is taking a company from zero to maybe 200, 300, 400, but I'm not sure I want to take it from 1,000 to 10,000.
00:34:58
Speaker
I went back to the board and said, look, I know we've put in a lot of time and effort. I don't want to do this. Let's figure out a way to get you an exit. In 2012, 2013, that's what we did. We sold the business in bits and parts. Because we were a holding company, we had different assets to a bunch of clutch of investors and so on and so forth. Basically, stepped out of the ring.
00:35:21
Speaker
Who got the India business? So there were a clutch of private investors who merged it into other businesses and stuff like that. So it was not like a large institutional announcement kind of stuff, which again, in hindsight, because we were a holding company structure, it was a lot more complicated, per se, to kind of do that.
Cube Health: Bridging Healthcare Financing Gaps
00:35:41
Speaker
But I decided that I was going to move to Singapore and start doing angel investments and figuring out what I can do there and stuff like that.
00:35:50
Speaker
How much liquidity did you get from this exit event? Decent. I just want to say decent. I don't want to mention the numbers, but it was decent enough for me to think about just spending the following years basically becoming an angel investor.
00:36:10
Speaker
And so that's what I did. I moved to Singapore and said that that's what I was going to do. So I set up a fund along with a few friends, did some angel investments both in India and the former Soviet Republic, so the Russian continent.
00:36:29
Speaker
You had no exposure to that market. What made you want to invest it? The logic was Russia, across the entire former Soviet Republic, while there are different countries, the common language is Russian.
00:36:46
Speaker
So, it's like the English-speaking population, right? So, the common language is English, but the local languages might be different. They had demographics which was very similar to India. A lot of young population internet penetration was significant and so on and so forth. So, all of the arithmetic around it or the thesis around it made sense. And essentially, they were cloning businesses from mature markets. So, the idea was invest in clones and then figure out kind of move in that direction.
00:37:15
Speaker
the rocket internet model. Absolutely. So that was the idea. So we did about three investments in a couple of those areas. And then I also invested in India. What were your Indian investments? So I invested in this company called First Moms Club, which is the largest community of Indian mothers
00:37:35
Speaker
in the world and it's still operational and Ruchita does a fabulous job. She's a founder or CEO of running that business. Another one was a company called Digital Republic, which is still operational. It's an agency business. It's actually a full disclosure. It's run by my wife.
00:37:54
Speaker
And the other investment I did was this healthcare company called Cube Health, which I now run. And so my next epiphany in life happened where my father was actually diagnosed with cancer.
00:38:09
Speaker
And, you know, so that kind of laid the foundation, so to speak, the genesis for Cuba. But I'll take a pause and let you ask me some questions and then jump into it. No, no, no, this is pretty fascinating. Let's just continue with that. I don't have any questions. I keep interrupting you when I have questions. Don't worry about that.
00:38:27
Speaker
So I reached out, needless to say, any family that has undergone a health condition like that, you kind of get exposed to a lot of things. I reached out to my dear friend, who's also the co-founder of Cubel, Gagan Kapoor, and I said, listen, can you help me? What was the pain you saw there? I'm coming to that. So I said, Gagan, can you help me? Dad's got this.
00:38:53
Speaker
find good doctors, good hospitals, what should I be doing, insurance, etc. As it turned out, Duggan's father-in-law also was suffering from terminal cancer. He and I have known each other for 20 plus years, but we happened to reconnect at a time when both of us were having a common situation in our personal lives.
00:39:16
Speaker
his family, and let me first tell you his background, and then I'll segue into the response to your question. Gagan actually spent over 10 years with Ernst & Young setting up their private equity group. Subsequently, he ran a private equity fund called Argonaut. He was a country head, invested both in public and private markets. Then he was called back to his family business, which was India's second largest insurance PPA, or a third-party administrator. They're on the back office for the insurance company.
00:39:44
Speaker
It was the second largest one, and he was running that. Father-in-law said, listen, why don't you come and take this over, run it until my passing, and once I'm no more, then you can eventually sell the business and then do all of that. Govind did a fantastic job, expanded it to Sri Lanka, Bangladesh, seven countries in Africa, and all of that. Through that process, understood the healthcare insurance business and also the healthcare business in general.
00:40:09
Speaker
The pain point for me was like a pain point for any other Indian, which is, number one, that insurance doesn't pay for the entire health care. Even after 35 years today, insurance penetration in our country is less than 25%. So three out of four Indians do not have insurance, or if they have, they are usually underinsured, which was the same case with my family. Insurance was, health insurance was always a tax-saving measure.
00:40:36
Speaker
It was never to mitigate risk or whatever. Your chartered accountant will advise you that this is something you must do to save tax. Needless to say, you start thinking about spending from your pocket. The way you think about spending from your pocket is you spend from your savings or your borrowings. That's how Indians pay. Basically, you are either underinsured or uninsured.
00:41:04
Speaker
Borrowing is very common, but it is expensive either financially or emotionally. More importantly, this entire relationship between you and the healthcare providers is a David versus Goliath kind of situation. It's very high friction, pain in the ass, and it's one of those only industries where the payer doesn't have any power. In retail, in hospital,
00:41:33
Speaker
We need retail or any other industry in hospitality. If you are paying, they treat you that, hey, that's my customer. I need to really take care. But in healthcare, the power rests with the recipient of the money. And that was the pain point. For me, I was like, this is ridiculous. First, I don't have choice. It's easier for me to find a hotel or a restaurant to go to than to find which hospital or clinic I should go to. That's just bizarre.
00:42:03
Speaker
I don't have a comparison platform, I don't have choice and the only way I have to pay is pay from my pocket. I have to pay whatever they tell me and I have to pay 100% upfront. It's not on services delivered. Fortunately, because Gagan happened to be in insurance and they being the second largest EPA, he understood how healthcare pricing works.
00:42:28
Speaker
He understood that when they charge you 2 lakh rupees for a procedure, what does that mean? And what is their real margin? I managed to get a great deal in my touchwood. My father is doing well, and he's living with it. But he's gone through procedures and stuff like that. But he's all right. But that journey really taught me the pain point of an average Indian. And I didn't come in from the healthcare industry, as you know. So therefore, for me, I was dealing with what everyone else in India deals with.
00:42:58
Speaker
Perhaps not as worse, but at least to a great extent. So Gagan and I basically said that, listen, healthcare in India has gotten sophisticated. There are better hospitals, et cetera, in private that are available. But it's equally gotten opaque and it's gotten expensive. We need to figure out, we need to do something to bridge that gap. So essentially, how do you bridge the gap between what the health insurance actually pays for and what the actual healthcare expense is? So we started digging deeper.
00:43:26
Speaker
Here, I'm going to throw some statistics at you. Over 70% of an average Indian's health care expense is paid from their pocket, which means paid from their savings or their borrowings. It's the single biggest reason why Indians fall below the poverty line every year. The single biggest reason. COVID has accelerated that. Over 5.5 crore Indians actually dropped from middle class to poverty straight off. And these are working class people.
00:43:55
Speaker
So when you look at the population of this 1.2 billion people or so, half a billion of us are employed in some way, self-employed, working for the government or private. The rest of the population depends on either these employed individuals in your family to pay for health care, or you depend on the government.
00:44:15
Speaker
So if you depend on the government, you're depending on all kinds of government schemes or government hospitals. But because as a country, historically, we've not invested enough in healthcare, private healthcare kind of has come in and filled that gap. Which means healthcare has gotten expensive and it will continue to get more expensive. So we said the employed Indian essentially depends on their employer to take care of their healthcare needs.
00:44:44
Speaker
And the employer basically says, while you're working for me, I will give you a group medical aim or what's known as group health insurance, right? Because that's a necessary part of your CTC or cost to company of your employment. So I'll give you that. So the employed Indian goes through life thinking, I have an insurance bid that my company pays. And until they actually have a need.
00:45:09
Speaker
Once they have the need, they start calling up HR and saying, listen, you mentioned I have a group medical claim. Now I want to change. And then that's when you realize that that insurance is going to pay for less than 30% of your actual health care expense. And there are 1000 different conditions and inclusions and exclusions and all kinds of nightmare. Majority of Indians have experienced that now during the COVID period.
00:45:33
Speaker
Okay. And you realize that how severely underinsured you are. Now, if you are educated and perhaps senior management, you may augment that by getting a private policy of your own, but that percentage is literally in the minuscule single digits. So majority of them go through their employed life thinking, TK, we will see if there is something, oh, insurance doesn't pay for it, cello TK savings were made for this.
00:46:02
Speaker
By the time you retire, you realize that, oh, now I'm exposed. I don't have group medical. And it's too late or it's too expensive to get an insurance policy now, which means you spend the balance period of your life wiping out your savings to pay for your health care. Classic story of every Indian, right? They spend their lifetime savings on their own health care needs.
00:46:25
Speaker
The interesting thing is the group MediClaim, the average MediClaim cover per employed Indian is just 3 lakh rupees. Which, as you can imagine, doesn't pay for anything. It usually covers just the individual spouse, two kids and maybe two parents leaves out any other family member or anybody that you consider as family. And of course, if one of them ends up claiming, which means that most likely your senior citizens in your family will, it will leave the other people exposed and so on and so forth.
00:46:55
Speaker
So that became the genesis of Q-Belt, solving and bridging the gap between healthcare insurance payments and the actual healthcare expense. How do we put the power back and change the way India pays for healthcare? So that was the idea basically. So with that in mind, we said we need to do two things. Number one, we need to create a marketplace. Number two, we need to acquire users.
00:47:20
Speaker
The health service providers such as hospitals, clinics, diagnostic centers, etc. If we can aggregate everybody onto one platform and on one side aggregate all the users, that is essentially the employed Indians who can pay for healthcare. Now you have two sides to the marketplace, the buyer and the seller. Then you play the role in between of enabling the transaction. When you enable that transaction, essentially, you are able to control the flow and the experience and so on and so forth.
00:47:48
Speaker
So we spent about 14 months, went around the country using Gagan's relationships, aggregated over 11,000 hospitals, clinics and diagnostic centers.
00:47:59
Speaker
arm twisted them using charm and whatever other means that were available and convinced them to give us... Done to pay them out. Yes, correct. Done to pay them out. And got them to give us discounts of the rack rate of different kinds of healthcare services. And went around the country and started signing up corporates with a simple promise. We went to the HR teams and said, are you spending on employee healthcare?
00:48:27
Speaker
And needless to say, they said, yes, we do something. And we said, OK, great. I'm going to number one, make your life easy in health care administration. You don't need to do a beauty contest of different providers. You deal with me. I will take away the headache. HR guys loved it because they don't necessarily like doing this. It's not a domain expertise area for them. So we took that over. Number two, we told them that we will give you one price, lowest price guarantee on any health care services across the country.
00:48:53
Speaker
So if you're a multi geography company, you know, Delhi Bombay, blah, blah, blah, etc. You don't need to deal with SRL labs in one place Apollo in another or Medanta or whatever. You just deal with me, I'll give you one price, one billing, lowest price guarantee if you find anything cheaper will match it.
00:49:09
Speaker
And number three will tech enable the whole experience on your dashboard. You will know everything about how your organization health is and who's healthy, unhealthy, and therefore you can run programs. So we incorporated that business in November 2019 as Cube Health.
Simplifying Employee Healthcare with Cube Health
00:49:24
Speaker
Okay. Gagan left at that TPA which he was running. So as I mentioned, so his
00:49:30
Speaker
Father-in-law actually passed away. He eventually sold that business to Medi Assist, which is the number one TPA in the country right now, and he joined full-time. Both of us got together and put together a team. Pankaj, who's our chief operating officer right now, joined us. I started focusing on building out the technology and the customer sales side. The government started focusing on aggregating everything.
00:49:53
Speaker
And we incorporated the company in November 2019 as Cube Health. And we said, let's build the business in two parts. First, let's build the customer base. And second, we will enable and control the transaction flow.
00:50:08
Speaker
We now work with over 150 corporates across India through whom we manage 1.5 lakh or 150,000 employees of those companies. We are on track to double that number by March and we work across six industries from food services, manufacturing, IT, IT enabled services, financial services, and so on and so forth.
00:50:31
Speaker
with some of the biggest brand names in the country and the average size per employer is about 1000 employees where we go in and take away the headache of employee healthcare and workplace healthcare management for these HR people.
00:50:47
Speaker
everything from pre-employment health checkups to annual health checkups, vaccinations, you name it. Anything related to employee health care, we do that. We complement any existing health insurance policy that they may have. Typically, we will work with the insurer or whatever to fill the gap that the employee does not have.
00:51:09
Speaker
Because of that, now we have relationships with these employed Indians. And because we have those relationships, needless to say, we want to give them a marketplace. But by just giving them a marketplace is not enough, because the single biggest pain point, based on what I mentioned earlier, for every Indian is not necessarily to find the right medical care. It's about how do I pay for the medical care.
00:51:36
Speaker
So what Cube Health does is we offer pre-approved, no cost EMI to individuals to pay for healthcare. So 0% collateral free, buy now, pay later healthcare.
00:51:48
Speaker
So what happens is as an employee of an organization, let's say they would be an interest component in it, right? Or you don't charge any interest at all. So it's interesting again in our country that you can actually buy a 0% interest cell phone or a no-cost EMI washing machine, but there is nothing like that for healthcare, which is really, really sad, we think.
00:52:14
Speaker
If you want to buy a new television right now for your home, you can walk into a chroma, immediately convert that into an equated monthly installment at no cost, and take away. But you can't do for your cataract operation. You can't do that for your NGO.
00:52:33
Speaker
That is the product that we've built. We offer a pre-approved credit line of up to 10 lakh rupees, 1 million Indian rupees per employed individual through their employer. It's deployed through the employer. There is no liability on the company. The individual essentially downloads our app and they also get a physical card, which is like a regular credit card, except there is no interest.
00:53:00
Speaker
and you can walk across anywhere in the country as long as it is health and medical. You can just scan like you do Google Pay or you do Paytm or whatever, or you can swipe your card and literally take, let's say you're spending 1,000,000 rupees on a particular procedure, just convert that into 10 installments of 10,000 rupees each. No questions asked. You don't need to think about calling up a call center, should I swipe, whatever.
00:53:30
Speaker
So whether it's an emergency or whether it's a planned procedure, whether it is elective procedures, meaning dental, eye, skin, assisted pregnancy, veterinarian, or you name it, as long as it is health and medical, you can use it to pay for anybody that you call family. Now, when you say you call family, meaning it could be boyfriend, girlfriend,
00:53:52
Speaker
father-in-law, mother-in-law, grandparents, it could be your dog, it could be a favorite uncle, anyone that you are willing to pay for. So we've deployed that product actually just a few months ago, and it's rapidly becoming one of the fastest, buy now, pay later, the fintech and health tech, so to speak, businesses in itself. So that's our journey so far.
00:54:21
Speaker
Now, I have a whole bunch of questions. Let's first start with the B2B side of it, the employer onboarding part of it. You tell an employer that we'll take care of everything. Is this an automated, algorithmic, self-service approach, or is there an account manager who understands what they need and then
00:54:46
Speaker
build offering based on what that implies. It's the latter actually because healthcare is a very high-touch business. The more you speak to someone, you talk to someone, the better it is.
00:55:00
Speaker
So this falls in the category of employee health benefits, which the companies actually do that either because there is a government regulation around it. So certain industries, the government expects that you provide certain health care benefits, checking employees for communicable diseases, statutory compliances, etc.
00:55:18
Speaker
And then there are other companies that do this because it's a good HR strategy to show your employees that you care. So they have what is known as out-of-pocket expenditure on employee health care, meaning that the company has, let's say, you work for a bank and the bank will say, I will spend 2,000 rupees per employee per year to get an executive health checkup done, in a very simplistic sense. So they will tell you that, hey, Akshay, up to 2,000 rupees, if you go and do a health checkup, we will reimburse that money.
00:55:48
Speaker
But healthcare is a very boring topic, right? Most individuals don't like to do something about it unless something happens. HR, for HR, it's just a checkbox because it's one of those KRAs that they're supposed to do. So what ends up happening is less than 5% of an organization actually avails of this benefit, right? Number one. Number two, it's a nightmare because the industry is a cartel. It's opaque and so on and so forth.
00:56:17
Speaker
discovering price, discovering options. All of these things are impossible, let alone for the individual. Imagine the HR. The HR is like, gosh, I'm supposed to do this health event across all offices. How the hell do I find out which lab to go to, which hospital, whether the pricing is right?
00:56:37
Speaker
And somebody will come and sell you a gold executive health checkup package, and you're like, what the hell does that mean? So things like that. So we go in there, understand gender, we understand demographics, we understand age, and curate health care packages. We look at past claims data on insurance and actually curate these packages.
00:57:01
Speaker
But to be honest, for us, apart from simplifying healthcare management for organizations, which we do, we reduce their costs, we bring in their efficiency, make the employees feel like they care, it's ultimately about solving the problem for the individual. The corporate acts as a ways and means for us to reach that, to acquire that relationship.
00:57:25
Speaker
Once we acquire those relationships, we understand better about that individual. And we realize that that individual doesn't care so much about their own health, but they care for their families.
00:57:39
Speaker
So if I came and told you, Akshay, you must go undergo a health checkup. You'll be like, yeah, I know it's important. But if I came and told you that, hey, listen, when was the last time you underwent a health checkup for your parents? You'd be like, oh, OK, I want to hear more. And so that's a bit. And then the natural progression of that would be where you'd be like, OK, can you help me pay for this? Right. So when you onboard an employer,
00:58:04
Speaker
Does every employee of that company then download an app from where they get to know what all am I entitled to and then they get maybe a notification that your health checkup is due or stuff like that? Okay, so you help HR also manage that pushing of policies and
00:58:21
Speaker
sending communication that you must get this done completely. We do hybrid of WhatsApp and the app as well. We take over the communication and the relationship management. Let's say we sign up with your organization, you'll get a WhatsApp message saying that, hey, your company cares for your health, and they've organized a health checkup for you.
00:58:43
Speaker
It doesn't matter whether it's at home or you can go to the nearest diagnostics lab within a five kilometer radius, or if you want it even more convenient, the lab will come to your office. So in a conference room, we set up the lab.
00:58:57
Speaker
I'm in such a situation you really have no escape right you're gonna check up that once you check up is done all of your health records are available on the cloud in our app. It's not the boring medical looking pdf report it actually tells you actually show your sugar shows borderline you have a history of diabetes in your family.
00:59:18
Speaker
How do you get that? The vendors need to then upload it in a certain format, like how do you get this? Yeah, so we plug in into the back end, the lab information systems and the hospital information system. And so all of that raw data is kind of taken in. We are actually part of what is known as the NDHM in India, which is the National Digital Health Mission.
00:59:41
Speaker
which the government has put together, something similar to a UPI for payments. So a unified code, which is part of Ministry of Health and Welfare of our country. So as a result, all the data is secure, is GDPR compliant and data secure and so on and so forth. But what it does is using AI and data science to start finding patterns in that data and then recommend to you how you can live a healthier life and so on and so forth.
Standardizing Healthcare Pricing
01:00:08
Speaker
Amazing. So for an HR manager, this dashboard is like the only thing he needs to do with respect to health. He'll just click there and the employees get notified. But how do you... So this is not like a pure marketplace for you, right? This is more like a... Because you would charge something fixed and then maybe in some cities you would have a higher margin, some cities maybe at loss and all that. So that then you further then negotiate and run the execution for that.
01:00:38
Speaker
Absolutely. I mean, because we understand pricing of these things. So let's say you do a complete blood check or a CBC test. We understand price of a CBC test across the country. We understand it at a unit level. And the intent is that. How do you standardize pricing?
01:00:55
Speaker
How do you standardize pricing for the user? Today, if an elderly person in your family needs to undergo a cataract operation, why should the price in Delhi be any different than in Bombay? Significantly, at least. There might be some variance. You can go and have sushi at multiple restaurants, and the pricings will be different. But by and large, there is some sort of a mental parity that you have.
01:01:19
Speaker
You understand why Michelin star restaurant will charge you a particular amount and a regular street or whatever. But in healthcare, that doesn't exist. It's completely arbitrary. The intent is for us to standardize that. It begins with that and then once you throughput enough volume and once you control the transaction pipe, then you start doing it more and more. A lot of your tech from an enterprise side would essentially be about
01:01:49
Speaker
empowering the account managers who work with this corporate to help them create the right package or help them price it in the right way. They would be able to see average price across the country for something and then
01:02:01
Speaker
add a markup and then give a quote and stuff like that. Actually, we simplify it even further. There is a standard rack rate. For example, for health checkups, we have 1,510 different types of health checkups that are tagged in our system. There's a standard price across the country. We have over 3,000 something diseases that we track based on that there's a price.
01:02:19
Speaker
The intent is to get to a self-serve model on the HR side at some point in time, but like I said, healthcare is a very involved bit and they want to talk to someone. Let's take, for example, mental health. Organizations now, especially post the lockdown, want to measure their employee and their index, if you will, on depression, anxiety, and stress. For them, it's about how do I know how my employees are doing mentally?
01:02:46
Speaker
They want to talk to someone so that they can implement the program. Now, let's say you've implemented the program, which is a simple testing score. An anonymized, personalized employees answer a bunch of questions sitting in the comfort of their homes, privacy of their homes. On the basis of that, the employee comes to know their own individualized score, but the organization comes to know an averaged anonymized score.
01:03:09
Speaker
If the HR and the CEO knows that the majority of the percentage of your people are leaning towards anxiety, now you can run programs to address that in your population. Your organization health index can get better. These require conversations with an account manager so that they can guide you in the right direction.
01:03:32
Speaker
And what about from the supplier side, like once say there is a certain thing to be done, then are the suppliers like totally automated in that process or would someone call them and say, Okay, we need to
01:03:44
Speaker
than this and what's the rate you'll give me and how does that happen? Sure. To be honest, this is India. A big percentage of it still happens offline because it's very relationship-driven. But to be fair, a lot of the modern hospitals, clinics, etc., they are getting extremely automated. The fundamental infrastructure has been laid through lab information systems and health information systems.
01:04:09
Speaker
So we can plug that in. So it's a hybrid, I would say. But it's still a very relationship-driven business. We have relationships with all the big brands in the country. And because of that, somebody on the operation side will kind of plug in. More importantly, for the providers, providers being a general term for health service providers, we are a demand generator. We are a channel to sell more. We can get them customers. We get them curated customers. And we also finance the transaction.
01:04:40
Speaker
It's a no-brainer. If I'm a hotel and somebody comes and tells me, listen, I will bring you 50% of your entire sales and I will finance those guys so that they buy now, pay later, I'd be doing cartwheels and saying, hey, look, tell me what you need. That's an important point. We want to get the provider to ask us, hey, look, what do you need from me? Our simple response is, what I need from you is for you to treat my customers well.
01:05:08
Speaker
When a cube health user comes to you, treat them the same way you will treat a rich shake coming from the Middle East to your hospital or clinic for a treatment. Because if you don't, then I'm not going to give you more customers. It's as simple as that. It seems to me like a good path forward would actually be for you to raise large rounds and acquire
01:05:36
Speaker
these providers. If you really want to have control over the customer experience, then probably that would be the way to go. Is that on your radar?
01:05:47
Speaker
Two-part response. So first part, yes, we are, as on tomorrow, hitting the ground for our series A.
Future Plans for Cube Health
01:05:56
Speaker
So naturally, the intent is to build scale significantly because we are on a rocket ship right now. We've been growing over 150% quarter on quarter.
01:06:09
Speaker
We're just kind of holding on to the rails, so to speak, so we need to do that. The time is now, so therefore we are kind of doing that. No on acquiring the providers. It doesn't make sense for us to acquire the providers because for us, the focus is the user, the customer. Any kind of investment that we are doing is on making that experience friction-free.
01:06:34
Speaker
On the provider side, I'm running a marketplace like Amazon. All I'm interested in is working with each of those providers to better the experience. Let me give you a vision. Imagine a scenario where it's broken down into three parts, transforming the front door access to healthcare for the user. We are the first person you think of to call and access whenever you have anything related to healthcare.
01:07:04
Speaker
emergency or non-emergency. Number two, transforming how you pay for health care. You walk into any clinic, any hospital, you whip out your card or your phone and instantly just pay and convert that into EMI. Even if your insurance covers it, you can just get a reimbursement later or whatever else. Number three,
01:07:24
Speaker
is transforming how you experience care, meaning if there are IoT devices that sit in your home so that they can monitor and give advanced notification to the provider and that provider is plugged into the network so that the seamless experience happens and you will have somebody physically present like a swiggy boy or a dunzo boy at that hospital who will handle your admissions all the way to your discharge.
01:07:49
Speaker
You will feel confident to sell a elderly parent to that hospital because you've done a booking through Q. Somebody will take care of it. The experience of care in itself. If I have to do that entire vision, I just need to create a better engagement at the provider level. I don't need to own them. I think they are doing a fantastic job anyway.
01:08:17
Speaker
Well, you say that Amazon is a marketplace, but then Amazon has that whole private labeling business which is increasingly replacing the third-party brands who sell there. So what would be the corollary here? So the corollary here is that in healthcare especially, what you're looking for is the best option, the best choice.
01:08:44
Speaker
So choice is an operative word. Options are operative word. If I end up owning some of those brands and I keep pushing you towards that brand, what's the point? Maybe the best possible care is that, I mean, just to use an example, let's say the best possible care for cardiac care is medandam. And the best one for cataract might be shroffi clinic. And the best one for IVS might be another particular brand. Just because I happen to have an investment and whatever, then I'm doing a disservice to you as the use.
01:09:13
Speaker
No, but you're assuming that you'll not invest in building capability into that, no? I mean, you would probably, if you buy something like, let's say you buy a diagnostic chain, a Pan India diagnostic chain, to run the supply side, then obviously you would invest, you would use tech to make that chain better at what it does.
01:09:34
Speaker
Of course, but I think it comes down to the core of what we believe our business is. Our business is not providing better surgeries or better diagnostics. That requires a skill set of investment in resources that specialize in that. In fact, that's what we tell our partners, at least on the diagnostic side,
01:09:55
Speaker
Invest better in making your equipment better your flab bottom is better your lab technicians better leave the sales to us my job is to manage the sales experience the customer experience.
01:10:07
Speaker
Addressing all of those queries, providing the preliminary care, that's where I want to invest in. I don't want to invest in making a better infrastructure. Let's take the case of Narayana Health or NH hospitals. Their obsession is to provide the best possible care at the cheapest possible price, and they've expanded significantly.
01:10:26
Speaker
And I think there are people like them that have made that their life's mission. Why would I want to try and compete with them? I'm like, okay, great. Go ahead and do that, because that's what you're good at. Let me manage the customer experience on this. That's what I want to invest in.
01:10:44
Speaker
But to answer your question, if I have to invest, I will invest in AI, IoT, things that essentially do preventative, preemptive care, maybe palliative care. Those kinds of technologies are very, very interesting. We become a channel because we have a large base of customers to test that out. We want to invest in having more high-touch relationships so that you could be sitting
01:11:09
Speaker
In Japan, your parents are back in India, you can call up Cube Health and somebody will actually go and concierge the whole experience for them. That's what I want to kind of invest. Okay, so let me come now to the B2C part of this. Okay, before I come to that, what kind of margins do you make in this? If you price something at 100 rupees for an employer, like say,
01:11:36
Speaker
or 1,000 rupees for an executive health checkup in India, then what kind of margins do you make on this? Obviously, I can't go into details on that. But let's put it simply that it's enough for us to be able to offer 0% interest. Ah, OK. Got it. OK. So that was my, in fact, the next question I wanted to ask you is, how are you offering a 0% interest EMI? So that's because of the price differential.
01:12:06
Speaker
Yeah, I mean, it's amazing, right? I mean, going back to my earlier point, why is it that you can buy a television and a cell phone and a washing machine at 0% EMI? Clearly, there are economics at work where the financing company, the retailer and the manufacturer of the product have gotten together and said, let us lubricate the transaction by offering finance so that customers buy more, consume more and everybody benefits. You know, that's essentially the role that we are playing.
01:12:33
Speaker
Are you collaborating with Fintech to run this or you built your own stack on this? No. I think the Fintech infrastructure, there are enough fantastic companies that are out there right now. They enable that. It's a collaborative piece around it. Okay. Got it. When people go for these services where they can do the NPL,
01:12:58
Speaker
Do they book the service also through Cubels or I can just walk into any place? You can walk into any place wherever Visa and Mastercard is accepted. It could be Midnapur and West Bengal or Zairabad and Telangana or Siliguri or whatever. It doesn't matter. Just go in there. That transaction is anywhere routed through me.
01:13:19
Speaker
So you can pre-book it, post-book it, doesn't matter. Just walk in. Let's say you have a dog as a pet. You want to go to the veterinarian. Just go to your regular veterinarian. See if there is a cube QR code. If there is a cube QR code, you can scan it like GPAY. Convert that into an EMI in case it's a procedure that's slightly expensive. Or just swipe it.
01:13:40
Speaker
And the entire backend infrastructure is powered by Qube. Qube will then connect with you, help you figure out better options next time, and so on and so forth, and finance that entire transaction. But how do you know it's not getting misused? It's not getting swiped at, let's say, you know, whatever, at a restaurant? Great question. So the card is enabled and tagged so that it's only accepted at medical and health establishments.
01:14:08
Speaker
How did that happen? Talk to me about the backend of how you did this. It's a fairly common practice in the cards industry. There are merchant codes. The merchant codes essentially define the type of business you are.
01:14:22
Speaker
So so the merchant codes are enabled only to accept that so you can't walk into a mall and or a restaurant and then site it just is not possible. So what is like your current revenue number like and what is the meaning of revenue in this case is it like the total.
01:14:41
Speaker
Services and packages sold? Yes, that's right. You lost transaction value, so GTV is what we call it. Again, I can't disclose the numbers, but needless to say, within the next 12 months, we will be arguably the most dominant healthcare aggregator in the country in terms of the kind of throughput of business that we will be.
01:15:04
Speaker
This episode of Founder Thesis Podcast is brought to you by Long Haul Ventures. Long Haul Ventures is the long haul partner for founders and startups that are building for the long haul. More about them is at www.longhaulventures.com