Become a Creator today!Start creating today - Share your story with the world!
Start for free
00:00:00
00:00:01
A Healthtech’s Journey Of Finding Product-Market Fit | Kiran Kalakuntla @ Ekincare
455 Plays2 years ago
Imagine a world where a standard health checkup was more sophisticated than what your doctor can do for you today. Kiran’s venture, Ekincare is doing just that. Kiran talks about the challenges of finding the right business model, of raising funds, and the insights he got along the way about how to solve healthcare challenges for India. This episode is really a masterclass in finding product-market fit.
Know about:-
- The relativity model of healthcare
- Competitive differentiation- data-first approach
- Target market
- Strategy for blitzscaling
Recommended
Transcript
Introduction and Kiran's Backstory
00:00:00
Speaker
Hi listeners, this is Kiran Kalakuntla. I'm the co-founder of EakinCare, a full-stack health benefits platform.
00:00:19
Speaker
This episode of the Founder Thesis Podcast is really a masterclass in finding product market fit. Your host Akshay Dutt is talking with Kiran Kalakuntala, the founder of the health tech startup Ekincare. Kiran spent almost a decade in the US as a product manager with large telecom companies. He then came back to India with the itch to do something of his own and identified healthcare as the area to build in.
00:00:44
Speaker
This is where the journey of Econcare starts. And in this conversation, Kiran talks about the challenges of finding the right business model, of raising funds and the insights he got along the way about how to solve healthcare challenges for India. Today, Econcare serves 2 million employees of 500 plus companies and has raised more than $20 million till date.
00:01:06
Speaker
Listen on, and if you like such insightful conversations with disruptive startup founders, then do subscribe to the Founder Thesis Podcast on any audio streaming app.
Career Transition and Innovations
00:01:22
Speaker
did my mechanical engineering in Hyderabad. And just like every other South Indians, I had to go to the US and pursue my master's there. More there, I graduated from Duke, which is one of the top schools in the US. I did my master's in engineering management. One of the CFOs of one of the large telecommunications company, he happens to be an alumni of Duke. And we happened to meet. We started a conversation. And then he said, why don't you come join us?
00:01:49
Speaker
This is all Intel which was acquired by Verizon in the US. It was down in the south in our cancer. And a person from a mechanical engineering actually moving in telecommunications as a product engineer was a big step up for me. Literally, I was running around figuring out how am I going to cope up with the telecommunications stuff. What does a product engineer do? Is it a product manager, which is a marketing or a customer facing function? Or is it a R&D engineer?
00:02:16
Speaker
is an interesting role that they had open which was typically if you look at any large companies there's always marketing department which is they have a vision they want to execute on something then there's a product and then there's an engineering department and typically there is chinese walls between the three departments and they're not in sync because any company engineering and product or engineering and
00:02:38
Speaker
our product and marketing are not alike. And this was a role that was actually looking to bring all the three departments together. So somebody who understood product engineering, somebody who understood business, somebody who understood product, try to build a roadmap from a product point of view, take it to the engineering team to execute on it, then finding the right positioning for the marketing to execute on it from a commercial point. So it was a hardcore programming kind of a,
00:03:08
Speaker
concept, but it was a product engineering. And what's a product for a telecommunications company? Is it like, say, Connor Tunes or voicemail? Absolutely. So, for example, one of the products that I worked on early on in my life was we wanted to build like an iTunes kind of a solution, which went default on every device. Back in the day, there was no smartphones. This I'm talking about 2006, 2007. Nokia Blackberry era.
00:03:37
Speaker
Absolutely. Nokia Black Windows era. Canbrew was the predominant OS back in the day. So building an iTunes that could cut across OS's that could come preloaded. Now, how do you build content for that iTunes? How do you talk to the studios to free develop the digital rights management to go with the OS? And then how do you ensure that buying the purchase the whole nine yards when it comes to it? That was
00:04:03
Speaker
That was a real solution. It is Wink. It is similar. Exactly. Then my first challenge getting into hardware was my SVP back in the day called me into his room and said, Kiran, now, by the way, pick up the smallest phone on the table and picked up a motor riser, which was the thin flip phone. And he said, now your job is to figure out how to fit satellite radio into this phone.
00:04:27
Speaker
Okay. He put me on a flight next day, go to CDSX and negotiate with them or discuss with them in terms of the program. It was a pretty ambitious project. How do you put a satellite radio? It comes in pretty large size, into a motor.
00:04:42
Speaker
So those were the kind of innovations or challenges that I was working on. And from there did that stint for quite some time, more into product development. Product development was more into the roadmap that I had created early on. How do I execute on it? So that I commercialized that thought process. And then Verizon acquired all of them.
00:05:02
Speaker
So as an immigrant on H1B, I had limited choices. Either I have to take the risk that when the merger happens, I'll get acquired into variance, nor I have to leave the country in 30 days, if not. And that's when, again, one of my alumni from Duke, who was at AT&T,
00:05:19
Speaker
He suggested why don't I interview with AT&T and do a product marketing and that's how I interviewed into product marketing where my role was more into smartphones, devices or how do I work with various OEMs across the world to bring best devices to AT&T's portfolio.
00:05:39
Speaker
How do I position them? How do I bring them to market? What is the pricing? Who is the customer? What is the positioning? What is the marketing message? What is the marketing campaign that we are going to put out? The whole supply chain, the backend integration, the whole line. Yeah, it's like a true product, 360 product.
00:05:56
Speaker
Was the Apple deal signed by the time you joined that iconic deal of Apple and AT&T which
Returning to India and Startup Challenges
00:06:02
Speaker
changed both their fortunes? It was within the same department, but it was managed secretly by another team. So during that timeframe, during my time, I launched more than 30 devices, smartphones, launched Android devices. The first Android device in OS version to multiple versions and the first Motorola slash Google. The Nexus series.
00:06:24
Speaker
Yeah, I launched the devices in the US. First, Galaxy smartphone from Samsung, a lot of mice. While the entire devices team used to sit out of Atlanta, we used to sit out of Seattle, like a world startup kind of an environment where they need to bring out innovation. And for close to nine years, nine, 10 years living in the US, launch multiple products and all that,
00:06:50
Speaker
and decided to take a break, actually, to take a break and come back to India for a year, see what's cooking in India. I come from a business family. We always want to create something. I want to build something on my own, and I don't see a way to do that in the U.S. That's when in 2014, my wife urgently agreed for us to move back. Moved back in 2014, took us a bad girl for a year. To figure out what you want to do.
00:07:16
Speaker
I didn't have any agenda. I knew I had to do some education, something in healthcare, because these are two areas which, again, one of the best advices I got when I was leaving D&D was, again, my super boss. The value of the company or the solution you create depends on the complexity of the problem that you're going to solve. The more the complex, the more the value. And if you look at India, if you look at education or healthcare in India, it is extremely complex.
00:07:44
Speaker
And at the same time as somebody who was living in the US had everything, they know that these are basic things. These are fundamental things. And at the same time, you're doing it for profit, but at the same time, you're impacting a lot of lives. You're earning money in the way of doing good for the society. So that's why I picked health care and education. Didn't do anything for the first three months, and I was bored out of it.
00:08:05
Speaker
sitting at home and meeting relatives and decided now it's time to start looking at something. Interestingly, again, when I say my journey has been a connection of multiple dots. So the first person I picked when I moved back to Hyderabad was Sunil, who was part of a large group of companies, very nice gentleman. He was a few years older to me. When I was at D&D,
00:08:29
Speaker
On the buying side, he was on the selling side. He asked me to come sit out of his office every single day because it gives you the discipline to keep thinking. And started working on a couple of ideas. One on the education front, again, wasn't able to vision building a large company out of it. It was more of a novelty or a tool where I wanted to easier for parents to decide between which school, which is the best school based on multiple scoring mechanisms. Then one was I wanted to build
00:08:57
Speaker
remote monitoring platform for non-resident Indians like me, who wanted to keep track of their parents who were back in India or any of their dependents. And that's how the name Electronic Kitten Kincare, that's how the name Kincare was. And so decided that healthcare is a larger product. Healthcare is
00:09:15
Speaker
Yes, as a product guy, what excites me is
Ekincare's Evolution and Data Challenges
00:09:18
Speaker
the complexity. The more complex, the more interesting it gets for me to solve, and that's why I decided to pursue more of eCare than the education product. And interestingly, while the problem statement was there, while I spoke with a lot of my friends in the US about this problem, when the time came to pay for it, a lot of
00:09:38
Speaker
willing to pay for it because that was shocking for me. That was an eye opener for me. Also, this problem statement was primarily because I went through my own personal pain point while I couldn't contribute to my parents' health care journey, my dad's health condition, no data for me, even show it to my friends in the US who were part of the doctors or part of the doctor network.
00:09:58
Speaker
And that's when I said there got to be a better way. Here, I'm dealing with 4G technology. Here, I'm dealing with variables. And I'm in late 3D technologies and on. But when it comes to keeping track of your parents back in India, you pick up a phone, you talk to them. Did you take medicine? Is everything fine? And you hang up.
00:10:17
Speaker
and your parents are invariably lying. They don't want you to stress out. And then I thought there got to be a better solution. That was the genesis of Incan care to build a platform for somebody who wants to really take care of their dependents health. And as I thought the problem was complex. Now, once I got into the trenches, I realized the problem was hairiest also. What do you mean hair hairiest? Because
00:10:40
Speaker
There's no data. There's no data. There is no standardization. There's no interconnection between hospitals. Now, if I want to build a platform, like for example, if you're using a tool, let's say we are using any new age technology, the data is clean structure. That's how you are able to make an analysis and a decision. But if the data doesn't exist, if the data is not clean, if the data is not standardized,
00:11:04
Speaker
I can't be sitting on a high throne saying I'll build a platform and then analyze this because the platform is useless if the data isn't clean. You were planning to build some way to take care of the health of your dependents, which would mean say an appointment, cooking, medicine, ordering kind of an ecosystem or something which is more personal.
00:11:29
Speaker
Very personal, right? It has to be an assistant. If I took my own example, I'm not from a healthcare background. I'm a mechanical engineer who's working at telecom. Don't know the head or tail about healthcare. Now, the platform should be intelligent enough to say, Kiran, this is the time for your father to go for a cholesterol check. Or your father is at a risk of X, Y, and Z.
00:11:48
Speaker
And it has to be like a digital health assistant that can actually keep you true to what the next step is in terms of your dependence. For that assistant to be that AI, artificial intelligence, again, you need data and you don't have data. So we took the most arduous, the difficult route of solving for that before we built that form literally.
00:12:11
Speaker
So why do you need the data? If you want to create an assistant, you could hard code it. You could have a panel of doctors and they could chart out 100 different symptoms and their possible underlying conditions and whatever. And then you could do the hard coding of it.
00:12:27
Speaker
So healthcare is an ocean. So when I say healthcare is an ocean, the open graph, the relativity model when it comes to healthcare is phenomenally large. For example, I'll give you a simple example. If you look at the number of permutations, variables that would impact an individual's health, 30 year old with a family history of diabetes, last cholesterol was bad, but taking 5,000 steps per day, there's another profile hosting 10,000 steps per day.
00:12:53
Speaker
One profile is a passive smoker. One is an active smoker. That one is non-smoker. One has other chronic conditions. And if you keep adding these variables, it can be like, when you say it can be hard-coded, yes, you could essentially mimicking a doctor. They could be like billions of combinations.
00:13:11
Speaker
Exactly, combinations. How do you build that? The simplest way, what you mentioned is there is a concierge service. There's one doctor, always called. Doctor looks at the data and gives you the information, but that's not scalable. You can only scale to few, but it's not scalable beyond. And somebody from a technology background would say, that is Jugad.
00:13:31
Speaker
That's not technology. And then we wanted to use the data. We wanted to leverage the data to be able to build this relative model, to be able to truly say, OK, you know what, Kenneth? By the way, your last lipids were bad, and your family is at risk. But you are not taking more than 5,000 steps over a period of 15 days.
00:13:52
Speaker
And which means your CVD risk is now elevated compared to three months ago, which means you have to do X, Y, and Z steps to improve your health. Which means, by the way, here's a basic health check for you to, again, assess. Speak to a doctor to reassess. And here's X, Y, and Z.
00:14:14
Speaker
basic steps that you can do to improve, start improving your activity levels, if that's the thing that they need to work on. So that is what we were trying to build and that we need data. And actually Srikanth, my other co-founder, came on board 2015, actually. Late 2015 is when I started speaking to him.
00:14:33
Speaker
His classmate at IIT Madras was my junior at Duke. And that's how we got connected. And again, we got connected on the complexity of health care. We got connected on the personal impact of health care within our own families. And we got connected on the number of possibilities that this could have, if we are able to solve. And that's how one board and we started building this platform together.
00:14:59
Speaker
So you were talking of the approach you took to gather the data. What was that approach that you took to gather the data? It was very difficult, literally. Our entire seed round was burnt in actually figuring out this problem state. Because I will tell you openly that today, while hospitals don't have a clue in terms of what to do with the data, we went to multiple hospitals to say, hey, give us the data. We are building this thing. If you don't have data, you really can't do anything about it.
00:15:27
Speaker
and hospitals are not willing to part with that data. It's sensitive. You're asking for patient records, tests. There's nothing sensitive about it when you actually go visit a hospital because those records are lying in an open room like a trash can. So there's nothing sensitive about it. It's just that most of the folks that I realize don't want to share that data because they feel that there's value out of those records. They don't know what
00:15:53
Speaker
With it, they don't want somebody else to benefit from it. It's as simple as crap mentality. And we approached multiple hospitals to say, hey, give us the raw data, give us the dump of information. We both will. Whatever is fine, we also, right? We didn't do it. The data you were seeking was like patient age, patient gender, date of test results, doctor's diagnosis, so on and so forth.
00:16:16
Speaker
That's when we said, OK, why don't we go the harder route of launching a P2C application where users can upload their medical records, take a picture of their medical records, and upload it on EakinCare. And then we use that information. We analyze that information and give them insights as a P2C. So this was more of crowdsourcing the data when we are not able to get it from an enterprise.
00:16:40
Speaker
And we did decently well. Within Hyderabad, we had 200,000 users who took pictures, uploaded medical information. We collected a lot of data. Pat, one question here. You raised a seed round. How did you do that? Like with friends and family? No. Sunil, the mentor, was there. I went to him and said, hey, this is what I'm planning to do. And I asked him for a 10 lakh seed round. By then, I turned my own 10 lakhs into the company. And I said, hey, I'm looking to raise a 10 lakh seed round. And he laughed it out. And he said,
00:17:09
Speaker
Yeah, I've had that Lexus peanuts. Don't know the background, never done a startup is like, no, Karen, go back. And back in the day, I showed him the projections that in five years we would do somewhere around six to eight crores in terms of revenues. Now, again, it's the middle-class thinking that kicks in at
Pivot to B2B Strategy and Growth
00:17:29
Speaker
Cheka Road.
00:17:29
Speaker
What did you project? Like you thought that people will subscribe to the assistant, like there'll be an annual subscription fees. So this was for the NRIPs. People would, NRIPs would pay for the subscription for it. And that's how we would get to six to 10 crores in five years. And he's like, Karen, this is peanuts. Please go back and read the numbers. By the way, he had a venture fund.
00:17:51
Speaker
at that time. He called one of his associates and said, hey, just sensitize him about venture capital a little bit. And that's when actually my thought process opened up, not to limit your thought by what is today.
00:18:06
Speaker
but to think much bigger than where it could be. And that's when I had to redo the numbers and then based on the numbers and based on the conviction. Because he was seeing me coming in every day, sitting outside his office, progressing along the way. That's when he said, I'll write you my first check. He undid one crore as a cedar.
00:18:24
Speaker
And then after him, there was another gentleman, Sreena, who had an IT services company building, healthcare technology for US-based companies. He happened to me through a common connect. And he said, I will also put in a crore. And that's how we raised the seed round two crores, even before we had a product. Which is a pretty good launchpad.
00:18:46
Speaker
Yeah, for somebody who was thinking of raising 10 lakhs. I was giving this money you would have mostly spent on acquiring users who will upload like it would all have been spent on performance marketing, Facebook, Google. Absolutely. Even gorilla marketing, we used to go to the, I would say the parks in the morning where people used to jog and show them the application.
00:19:07
Speaker
They used to drive us away. We used to go to the malls, show the application, take feedback. That's how we're doing it, like grassroots level. That's how we collected a lot of data. We use that data, build our algorithms from, from OCR is again, we didn't build our OCR. We used whatever was off the ship. We used to select then Microsoft OCR, but we built a lot of technology above OCR because
00:19:34
Speaker
What OCR does is it just extracts the characters. But when you take a picture, the picture could be slanted, or it could be slightly disaligned, or when you draw grids and extract the characters, you have to reshoot all of that to be able to make sense of it.
00:19:50
Speaker
You reconstruct that's one portion because if the line is slightly slanted, you could actually connect wrong characters and it doesn't make sense. It will be a garbled message. One is reconstructing the characters. Second is as analyzing those characters because some would say CHL, some would say total cholesterol, some would say nil, some would say zero, some would say negative. That is one problem statement. Now, the third problem statement is the normal ranges are different for different
00:20:20
Speaker
labs, based on the equipment that they are using, based on the sample, this test kit that they're using, based on male streaming, based on whether pregnant, not pregnant kid, age. So when you're reconstructing, you have to take all these variables into account. And then once you're reconstructed, you have to triple check that because if you take total cholesterol, but instead of negative, you take the line below, even if it's positive or something, and you apply it to some other, again, protocol cholesterol is a bad example.
00:20:49
Speaker
with a component, the whole report goes incorrect. That's the level of complexity that we were working on just to build, understand the data that we are extracting, understand, reconstruct that information so that it can be put in clean fashion. Once that is done, now we have to standardize. Standardize business
00:21:09
Speaker
For example, Akshay, you could maybe go to Fortis. You go to Max. You have two reports, but the two reports are not identical. Now you have to standardize the two reports to say, actually, by the way, your lipids trend is this. Only then, I can say, Akshay, based on your last three years trend, this is what I recommend. So now you have to standardize, build that trend. And once you standardize build trend, now you have to personalize.
00:21:35
Speaker
Get the demographic data like age, gender, and then other variables, family history or lifestyle, all of that. Then recommend based on that personalization. For recommendation, you used human experts. Did you onboard doctors to give recommendations?
00:21:53
Speaker
Srikant is not from healthcare. I'm not from healthcare. If we start recommending it will be like engineers giving healthcare advice. On board with a couple of doctors who gave us the blueprint. We had to build a lot of, I would say, structured models. I would say decision is to be able to find, to take
00:22:12
Speaker
the lowest common denominator to recommend for that. And what we realized is we can't continue doing this because, like I said, healthcare is an ocean. Let's focus on the 80-20 rule. 80-20 in the sense like what are the key chronic conditions, the pandemic that is in India, direct hypertension, cardiovascular disease. So we started going deeper into these three areas rather than trying to get into kidney, liver, all of these other chronic conditions. And that's how we started building the model.
00:22:42
Speaker
And what we realized is these are the root cause for everything else, for our human health. And then what we realized is now, while we are recommending all of this, we need something that our user can constantly track. Just how you have a credit score to say whether you are doing better, you are credit worthy or not. You need a score for your health. What is Akshay's health today?
00:23:06
Speaker
What is actual today means you have to go through my health is ABC. I've done this health checkup without all that. And actually say, by the way, health is 500 out of 800 today. So we then build a scoring mechanism, able to say, OK, this is where.
00:23:22
Speaker
The individual's health is based on all the parameters that we have and what is the delta from a good health, a golden sample to where Akshay is and how can Akshay get to from point A to point B. That's the recommendation based on diabetes hypothesis in the background.
00:23:41
Speaker
This algorithm for recommendations, did you use like a machine learning approach where you said, okay, the doctors will keep recommending and eventually the system will figure out what to recommend? Or did you like hard-code it? You first hard-coded it. So that was decision tree model. AI first comes the decision, the decision tree model. If it's A, you break it down. If within A1 and you break it down, that's how we started. But as we started getting more and more variables, more and more data,
00:24:10
Speaker
we moved into assisted learning. What does that mean? Assisted learning. So now there is data and we started bringing the models. So we try to see that, okay, this result means you could infer this way. And that's how we moved into machine learning.
00:24:27
Speaker
saying, okay, now we have data, then the machine can start learning itself based on the data. To be honest, when we started building the extraction or this entire algorithm, our accuracy was 70%.
00:24:42
Speaker
And how do you measure accuracy? You had a human expert looking at the recommendation. We had a human expert looking at that QA from that point of view. And the human expert would constantly feed in the information saying, OK, this came in incorrect. This came in correct. And it was literally for even today, we're still improving it. Today, it's since 98 to 94% accuracy. But we're still continuously improving it.
00:25:11
Speaker
It took immense amount of data. It took immense amount of QA. It took immense amount of iterating our algorithms. I think the difference between Econcare or any other company is our approach was data. So we had, even before we invested in services, building a platform for appointments or going out and building a supply, all of that, we invested in technology, building for that data.
Scaling B2B Services and Corporate Solutions
00:25:35
Speaker
In fact, we spent a lot of money just on that.
00:25:38
Speaker
And that still forms the core or I would say the differentiator or the moat for EakinCare today. I might sound cocky, but there is nobody in the entire Southeast Asia who can structure like EakinCare medical information.
00:25:54
Speaker
I'm saying Southeast Asia because the developing countries, the medical infrastructure is very asymmetric and structured so nobody can do it. Give me examples of what the recommendations would be like. Would they be like mostly diet and exercise or would you also be recommending a medicine?
00:26:10
Speaker
And not medicine, diet, exercise, health check up. When is the right time to go for a full-on health check up? When is the room to speak to the right specialist? All of that. And again, we didn't boil the ocean because data was sparse. Again, we were sitting on a very, if you look at the kind of ocean that we are trying to swallow, the data that we had was a drop in the back. We were cognizant of our drawbacks. So we were taking baby steps.
00:26:35
Speaker
And from 2015 to 2017, we continuously built thanks to our investors back in the day. We didn't even have a metric to track. Yeah, right. There was no revenue. It was pure data collection fees.
00:26:48
Speaker
There's one revenue that we were tracking. We were trying to solve this basic thing, and our investors were supportive of it. We knew this was a public space that we were trying to solve. By then, we decided NRIs would not pay for the parents, though they're happy to pay for their OTT stuff back in the day, $9 per month when it comes to parents. Literally, it was like pulling teeth to pay for parents. So we have given up on NRIs back in the day, saying, this is a useless bunch who will not take care of their parents.
00:27:18
Speaker
And that's where we shifted to B2C. And we were doing this more like a cloud, just like how Kindle is for books, how ideal is for music, how Google picks is for pictures with our advertising campaign. We did a radio ads and all to actually try to use it.
00:27:35
Speaker
But interestingly, 2017 is when we stumbled upon this opportunity from UHC. What was the full file? United Healthcare India. They had a TPA on. TPA is a third party administrator who helps insurance companies to settle claims.
00:27:50
Speaker
Correct. Literally, there was a time when we were trying to reach out to this person and the person wasn't giving us time. We literally had to force ourselves into the office to show what we had built and he was amazed. What were you expecting from that meeting? Like, why were you so insisted on meeting?
00:28:07
Speaker
There's a TPA who's processing data. They're doing it manually. But this will help them to structure that information. You're automating most of it. Interestingly, the person said they were trying to build something for several years, something of this sort. And it remains that this is already cracked. That's how we got their interest. And again, the TPA back in the days was actually managing the corporate health also. So let's say as part of TPA's group policies,
00:28:36
Speaker
They were selling group insurance policies. Selling the managing corporate health because the insurance would give them, give some freebies or additional benefits as part of the insurance as we're supposed to manage, take care of the annual health checkups and all the benefits that were added. And that's when there was a problem statement by saying, hey, by the way, we have the sister company, 9,000 employees. We do these annual health checkups every year across these 9,000 employees.
00:29:04
Speaker
We don't know after that what. Because as an HR, it is inhumanly possible for me to read 9,000 reports and say which one is good or bad. The only way is that, like you rightly mentioned Akshay, the traditional way of showing those 9,000 records to a doctor going through it.
00:29:22
Speaker
Doctor with limited knowledge at that one snapshot of that one report is going to make a decision on what to do next versus history, which is not an invention. That's when they said, let's do a pilot with one of the companies. We did a pilot with that company in a very rudimentary fashion, which is on Excel sheet because we didn't have a front-end or everything was back-end.
00:29:46
Speaker
But you already had the consumer app where people could upload record. This is what you wanted to do in your pilot that give employees access to the app, tell them upload your records, and then we would give you a recommendation. But they weren't allowed to use our application because they wanted white label and all of that. And we couldn't do it. Now we have to profit it for public. And so pretty much there's no strength in for it. Everything was force-fed on the back end. We got the raw data. We had to show it in the sheets to be able to give them the
00:30:15
Speaker
Like employees had to email their pass through reports and the current report which they got then. So the employees would go to labs, DPS would get the reports because they have to file the reimbursement on the claims. We made the reports from the EPA and that was really interesting for them because for the first time they actually got a sense of what the entire effort was about.
00:30:38
Speaker
How many are diabetic? How many are hypertensive? Where is the risk? Where do they need to focus? If they have 50 rupees and 50 employees, do they distribute rupee across every employee or they distribute 50 paisa across everybody and then save that 25 rupees towards high-risk employees?
00:30:57
Speaker
So there was no strategy. If there's no data, there's no strategy. Now that they have data, they could slice and dice and understand where, how, when, who, why to spend. And that's how this is interesting. We want to sign a three-year contract with you guys. And what do you mean by spend here? What does that mean? Like a company would give money to employees to go for like a gym, join a gym. If that was like
00:31:18
Speaker
Back in the day, if you would say preventive health for these companies, preventive health meant health checkups. So they would give a free health checkup for the employees to go use it, or they would reimburse their problems to go get a free health checkup. So you would help them to decide which employees need to be given a free health checkup and which ones don't need it.
00:31:37
Speaker
Everybody was given free health checkup. But from the data, we would give them websites as to how many are at risk. Because from that data, you can actually start predicting what could be the potential claims also for an insurance in future. It helps them do the underwriting better as well.
00:31:53
Speaker
Exactly. Like in retail, they ask you to go for a health checkup so that they can underwrite better. Group width doesn't happen. So that's the data that we were able to parse and give it to them. But we were on the buyer side, not on the seller side. On the buyer side, because now they can actually negotiate better in terms of their premiums. That's what it is.
00:32:12
Speaker
To be honest, that's when we signed our first B2B contract. Then we realized, once you see actual money, until then we were earning 10 lakhs per month or maybe 2 lakhs per month. But how were you earning money? You had no monetization model or you started selling the assistant service.
00:32:29
Speaker
We started based on the recommendations. When there was a recommendation and somebody said, hey, by the way, I want to book a health checkup. And we used to connect the local diagnostics and we used to take. You got it. Services. This was the first time that we said we'll pay 36 lakhs. Suddenly we had a big gap. We said, this is interesting.
00:32:50
Speaker
And so just to understand this 36 lakhs, so this would be say like a company like say KPMG, which would have say 1000 employees or 10,000, whatever, some number of employees would pay you 36 lakhs. And every employee of theirs would get like a white labeled app, which would be their health, but your health assistant in a way where they would be able to upload records and they would be able to avail the free tests, which is anyway.
00:33:18
Speaker
provided to them and they would be able to get some personalized recommendations and for a company like let's say KPMG they would be able to use this data to get a better pricing from insurance companies. Absolutely correct and that was interesting for us because if you typically look at any technology innovation or
00:33:36
Speaker
I've seen and have gone through is there's a bunker, there's early adopters, then comes a horse, then laggards. We went to early adopter phase.
Market Adaptation and Service Expansion
00:33:46
Speaker
And typically in the early adopter phase, typically the persona for somebody to pick up on new innovation already.
00:33:53
Speaker
There's typically high household income users, disposable income, who are graduates, dabble with technology, understand technology, they're not scared of using tech, and realize what is a better way to reach out to these early adopters are the best ways to go through these corporates. These are all graduates, high household income users, and more differently,
00:34:16
Speaker
We are getting clean data from the labs. Importantly, there is an intent for the user to go for a health checkup because it's free of cost. Nothing, they're not going out of their pocket. The company is paying for it. There is an intent for the company to push this because they want the employees to be healthy. There is a win for us because we want to drive adoption.
00:34:39
Speaker
for our revenues and also drive adoption for the data. And that's when we decided to ship off for B2C and switch to B2B. But B2C is still giving you the data, but it was not worth the effort either? It was abysmal. It will give us the data, but the hack is also high for that data, where we literally bought two crores.
00:34:59
Speaker
But I would have thought that this would be a pretty viral product which would have its own pull. I still have a big file of all my lab reports for the last 10 years with me. But if I knew that there is a way to digitize it, it is common sense, even when I thought the same. Any sane mind would say PR data lying in physical files is in digit format is better than physical files. But trust me,
00:35:26
Speaker
like to take care of their health until they hit the hospital. It's like filing taxes. You don't want to do it until the last day. Because I mean, it's common sense. Anybody would say, yeah, take care. This is interesting. But it was a push, not a pull. When we did that, interestingly, when we switched, we had shut off. We said sorry to all the
00:35:46
Speaker
Retail users saying, hey, by the way, you can download the reports, but we are shutting off our B2C because as product guys, we've been even serving two customers at the same. So that's when we started going deep on the B2D front, understanding what the use cases are, understanding what the pain points out from an HR point of view.
00:36:05
Speaker
And that's when our Noel Coutinho, again, one of my mentors, said, I speak to Noel, I'm switching to B2E. And Noel came on board in 2017, my other co-founder, who helped us. Again, he's a doctor by education. So that was our first.
00:36:23
Speaker
walked around the team until then there was a consultant doctor. He came on board, took over the selling, the enterprise, he had the background. And that one pilot moved to 10 companies, 10 to 40 companies, 40 to now close to 500 companies in 2020, two years.
00:36:41
Speaker
What is the persona of companies you serve? Is there a minimum headcount and help me understand your target market here? So again, it's a classic. It's a first time mistake, rookie mistake that we did, adding into enterprises. So we said, let's go after the dinosaurs, the large companies, which won 40,000.
00:37:00
Speaker
employees. What we realized is with large companies comes a lot of customizations, a lot of weak labels, and that derails our entire roadmap. What we want to do as a company, where we want to. So, in fact, our first 10 contracts, almost 80% of them were large companies, what we call it. I mean, from a size, purely from a size point of view, what we call is dinosaurs. More than 8,000, more than 10,000, if I had found.
00:37:28
Speaker
And that's when we realized actually the sweet spot for us is between 500 to 5,000 employee companies, the mid-market, what we call that size is the mid-market. And that's where we decided to stick to mid-market because that allows us to be nimble, focus on our roadmap. There's less customization. We don't have to white label the solution. We don't have typical versions of the product.
00:37:52
Speaker
It's more productless service with a large enterprise, more service less product. So that's when we switched. In fact, we had churned all our burning clients by the second year. It was more entry churn because we were switching to it. And I would say two steps back to spring forward, but that helped us build very robust product without having to sacrifice our roadmap.
00:38:14
Speaker
Today, when we say 500 companies, we typically have stuck to big pocket until I would say last year. Last year is when we started focusing on small enterprises as well, which is typically 50 to 500 employee companies as well through insurance distribution also. So today we do everything from preventive health
00:38:34
Speaker
which includes diagnostics, teleconsultation, mental illness, gyms, pharmacy, care management programs, dental, vision 2, I would say, insurance, which includes hospitalization, 2, or stop-ups, 2, now we are venturing into financing as well, healthcare financing, where anything that is not covered between these two spectrums will be taken care of the financings.
00:38:58
Speaker
aspect. So we want to track the entire healthcare journey of an employee on the platform. We want to ensure that their transaction originates and ends on the platform. We want to consolidate that data to make the individual more aware of their health and assist them towards the betterment of that health.
00:39:19
Speaker
Okay, so you're charging just for this software layer to companies or is it like a comprehensive package which includes one annual checkup and X number of free consultations or online consultations or whatever. What is it that you sell? Just help me understand that.
00:39:35
Speaker
So that's a good question. So for the first 10 customers, we sold it like platform as a service, like typical SAS issue. And what we realized was that 30 lags or 20 lags or five lags that we were getting was peanuts compared to packaging it and selling it. Because today some of our contracts run into two crores, two and a half crores too. Because in India, software is a commodity. If you talk to any family, they would say, hey, my cousin can build this
00:40:04
Speaker
Especially in South India. So for us, it didn't make sense to sell it as our solution alone. And especially because if it was not for healthcare where there's more dependency on the source and the data that we're collecting, that could have made sense. But in our scenario, we have to control the entire experience, control the data that we're also capturing. So there's no point just selling the software and then there is garbage in garbage out from the data point of view.
00:40:32
Speaker
Yeah, because the diagnostic labs could be any labs, but you would want to control the labs that work well with you and give you, let's say, each accords instead of whatever does the bundle include. Obviously, one test per year would be the bare minimum. What else can it include?
00:40:47
Speaker
So today, for example, the bundle includes annual health checkups, one dental, vision, discount on blood, prescription wear, mental wellness. If somebody is at risk or in care management program, reduction, diabetes care programs, then they would get 45% discount on pharmacy, a lens which is readily available with a tat of less than 20 minutes across 400 cities.
00:41:13
Speaker
and teleconsultation where doctors are available 24, 7, 365 days. Now we are adding, it's a platform so we can scale horizontally. So we have added care surgeries. We are now adding treatments. We are now adding lots more from a services point of view so that
00:41:31
Speaker
What do all of that individual or a company can envision when it comes to health benefits they can actually all on the platform and start the services we can price it because we have the underwriting capabilities to be able to access the real because we have the behavior and utilization data.
00:41:49
Speaker
And we control the market. It's a managed marketplace model. So we know our cost. We know our supply. We know financial pricing across the supply. So we are able to under-price it as a unified price for the customer.
00:42:04
Speaker
How much of the stuff in the bundle is stuff which you have to pay for and how it should be? Say 25% off on iWear may not necessarily be something that you pay for because you're generating a lot of leads for any iWear startup. It's an underwriting. So we've taken all of that to be able to say how much is the cost. For example, gyms. Gyms is a high ticket item. If somebody goes to gyms every day, we lose hand over fist from up.
00:42:32
Speaker
because it's a cost. So people will wind with costs anywhere per employee, per annum, from 2000 to 5000 rupees. If lawyers are paying for that, out of that, if all employees go for gyms every day, then we lose that 5000, let's say a month. Health check-up package would be around 1500 to 2000. If everybody goes for a check-up, we lose money. It's just the group policy, a retail group. Not everyone will utilize.
00:42:58
Speaker
would cost you 25,000 rupees for the same amount of cover. But when you get it in a group, you get it for 3,000, 4,000 rupees. Because you're distributing the risk across the behavior, across the demographics. So it's not just based on what is free and all. There's multiple variables that go into pricing it.
00:43:19
Speaker
access to Dim, so anybody who would have an app could show some barcode or something and then get access and each time they use it. Yeah, so we have a, again, we have a new way to there as well. So typically when we go, we say, if you take a example of a company, the way, when the gym access, the way they typically go about is,
00:43:40
Speaker
Employees are supposed to show them the gym membership that they've enrolled and they pay for that amount. Correct? It's a reimbursement. And if you actually look at the entire gym, most of the people that enroll at the end of the month, they hardly go for a week. But the company is bearing the cost for the entire month. Again, it's a leakage for the company.
00:43:58
Speaker
The way it works is we give them a fixed set of pool of sessions. If there are a thousand employees, all employees dip into that pool of sessions. If there is somebody who uses it every day, Johnny Bravo uses it every day, versus that pool of sessions is available for somebody who maybe wakes up one day and says, yeah, Ajman day, I want to start home Monday.
00:44:22
Speaker
On Tuesday, again, they don't say that pool is available. Once that pool gets depleted to 200 sessions or 100 sessions, they can again top it up. The HRs can take that decision off. It gives them a low CAPEX and more of an office model. The better for the employers, we have access to what we call FlexiGym.
00:44:41
Speaker
So you actually today can go use, go to Zumba today. Tomorrow you can go swimming. Day after you can go for, I would say bootcamp. So there are all kinds of gyms that are integrated where you can decide what you want to do today. And that's the flexibility that you have. You can go in the day, you can, the night, if you're traveling to Mumbai, you can do it in Mumbai. If you're traveling to Delhi, you can check closest partner, show the QR and access
00:45:11
Speaker
So, I guess all the services would have a similar approach where there's a pooled, let's say, doctor consultation would be similar. Absolutely. Doctor consultation, there's no pool, right? Because, again, doctors are available 24-7. So, we have doctors who are exclusive consultants to EakinCare. So, every service, we have looked. So, honestly, there is a lot of product thinking.
00:45:32
Speaker
in everything that we do. So we put the customer at the centre, we think what the customer, so we acquired a tele-consulting company some time back, our Celiskare, Hyderabad-based company. What we realized when we were building our tele-consulting solution was, one, healthcare is instant. Today, if you
00:45:51
Speaker
or to speak to a doctor because you now have a requirement. You don't want to schedule an appointment three days from now to speak to a doctor tomorrow or day after because it is instant and you want to speak to a doctor now without having to go through the hassle of payment and appointment booking because it's the immediate need and you don't know when that need could occur. It could occur even at 2am in the night
00:46:15
Speaker
it would occur during your working hours when we are chatting that I could parallel speak to a doctor. So that is when we decided we need to build a solution that is available 24-7. A solution which doesn't need appointment booking takes less than 30 seconds to connect to a
00:46:33
Speaker
general physician or solution doesn't ask for money because the money will be paid by the company. If it's not paid by the company, we first do the consultation and then ask for the money. Again, it's like a product thinking. If I were myself in that shoes, what is the experience I would want? If I were myself trying to use a gym, what is the experience I would want?
00:46:55
Speaker
These are high-trust customers. It's not like they'll not pay you because it's through their employer. Absolutely. That's the beauty of sticking to one payer. Now, if I try to do B2C and B2B at the same time, I would take that decision of putting the payment after the transaction because then I'll have a big leakage problem. This is only for a general physician kind of requirement. What about say a dentist or an ophthalmologist?
00:47:22
Speaker
There it's more of a scheduling because you want to speak to a specialist. It's not urgent. But is there also virtual or do you have types of clinics? Today it is virtual. We just launched our pilot for face-to-face.
00:47:37
Speaker
So today we work with more than 200 hospitals across India for other services from vaccinations to health checkups. So we are piggybacking on the same inventory for their own doctors. So beauty about going through the B2B2E route is we know our demand first, and then we build our supply. And when you know your demand and then build a supply, you're actually ensuring that the supply gets the money in the first three months.
00:48:05
Speaker
What happens is you build a network, and they don't see money, and they lose interest. And that's how we built the largest cashless network today, where we worked with more than 10,000 service providers across close to 200 cities, which is now going up to 250 cities.
Insurance Integration and Strategic Partnerships
00:48:22
Speaker
Or across these 10,000 service providers, every service is cashless. It runs on credit. And we have a ledger running with all our service providers in the back end.
00:48:32
Speaker
This must have been quite a task to onboard 10,000 service providers. You have a pretty large team in place, which doesn't slick. No, actually we have a more efficient team, more than a large team. Did you use product thinking there also to onboard service providers?
00:48:47
Speaker
Absolutely. Because we have a dashboard. There's a lot of backend stuff that we do. Then we use data. We look at the deviation mapping to understand what is the threshold within that print code that the partner has reached to be able to onboard the second part. And then more importantly, like I said, since we know the demand, our demand is controlled with the line, unlike a B2C. What does that mean, controlled demand?
00:49:10
Speaker
So let's say I'm onboarding the Company X and I know the Company X has X employees in Gurgaon and Y employees in Bangalore. I already know how many partners I have. I already know the capacity of those partners. Can the partner take another 5,000 employees in that or can I add another partner to distribute the wealth?
00:49:30
Speaker
Can I add three more partners to distribute the wealth? It's highly predictable. You will not see unpredictable spikes. Correct. So it is therefore a lot easier for you to onboard service providers also because you are pretty much able to guarantee them revenue. Absolutely. Maybe you don't even need to sell it to them that come and join the platform. No, all I was saying is that there is a lot of predictability and the partners know us, they love us because today we are not only sending them revenue,
00:50:00
Speaker
We are not only giving them prediction in terms of what their revenue expectation could be from EakinCare, we are also giving them insights in terms of their service qualities because today we also collect the ratings after each transaction from the employees. And we are able to see, by the way, xLab
00:50:20
Speaker
in your branch in this location has been consistently rated less than three out of five. And these are the two reasons why. And they love us because unlike a healthcare system where the payment typically happens more than 90 days in hospital. This you're talking of like through insurance claims and all like those payments take that.
00:50:43
Speaker
Our average payments are 45 days. So look at what are the problem statements for the provider. Why do they want to partner? Why do they don't want to partner? And trying to solve for those pain points. And that's how we built the, again, like you said, the product thinking. That's how we built the network. How timely payments give them more than what they have today. Zero CAC for them. We are the demand gen, you are the supply end of an approach.
00:51:08
Speaker
So you sell insurance through like you have tie-ups with insurance companies and you sell their policies or how do you sell insurance? Insurance is one of the things that you bundle. Yes. That must be like a code, like every employer you have must definitely be buying insurance from you. No. So some companies already have insurance through someone else and they only take insurance, the preventive health part of it.
00:51:32
Speaker
Insurance today, so if you look at insurance today, if you take more than 50 employees, 50 or 100 employees, the ecosystem is pretty mature. There are pretty large brokers out there who are doing a phenomenal job in terms of large enterprises and they get global mandates and all of that. Insurance companies also are chasing those large accounts because it gives them more premiums
00:51:57
Speaker
But if you look at the market, which is typically seven employees, that's the minimum for buying an insurance today and go lower also.
00:52:06
Speaker
But if you look at the micro and small enterprises, they don't get the same negotiating power as a large enterprise. And at the same time, not many brokers are focusing on it. Insurance companies don't want to go after so many small fish to get to a larger premium. That is where we are, again, it's a problem statement that we are focusing on saying, how can we be the master policy holder for all these smaller enterprises and negotiate as a collective bundle with insurance companies?
00:52:35
Speaker
to bring that economy of scale and distribute that savings across companies. So you become the group as far as an insurance policy is concerned, you are the group and then you have 20 companies or 50 companies who are taking benefit of that group policy.
00:52:51
Speaker
And historically, this hasn't worked, though it has been tried in the past. Again, they provide it, but they don't track the entire end-to-end. They don't track the customer. They don't track the engagement. They don't track the claims. They don't push their employees towards preventive health to be healthy. They build the hardest part, which is the preventive health, engagement, all of that, and only bundles. Today, Touchwood, our book is highly profitable.
00:53:19
Speaker
in small enterprises typically the books are not profitable from an insurance company point of view the loss ratio what they call when it comes to group policies all the small enterprises that we have all voted underwritten with our opd covers on top of that are profitable why is that because we look at it like a complete
00:53:37
Speaker
health rather than just an IBD or health insurance. When we sell insurance, we also drive awareness towards health through health check-ups, doctors, hospitals, all of that. So an average individual on an EKincare platform, I would say, is more aware than our person who is not on an EKincare platform about health.
00:53:56
Speaker
So therefore your users are inherently less likely to fall sick or get hospitalized. Correct. Amazing. And so are you like a corporate broker and that's how you sell insurance further or how do you do that? What are the nuts and bolts of?
00:54:13
Speaker
So we have master policy holder. Okay. And so you have a one size fits all plan for the SMEs or because you negotiated the best possible pricing for return. Yeah. Okay. And you also spoke about financing spends. How do you do that?
00:54:28
Speaker
So we just started working on this third. I would say this is our third pillar, important pillar for us. If you look at corporate users, so there is OPD, which we call preventive health, wellbeing, OPD, whatever the name, individual calls. That typically takes care of an individual from getting into a hospital.
00:54:48
Speaker
Once they get into a hospital, that's when the IPD kicks in, which is the hospitalization, which is the insurance cover. These two are working now. But there are wide spaces within this. For example, let's say somebody wants to go for a LASIK. If you look at the average corporate employee now, median age is around 27, 28. India has much younger population than any other country. So there are cost in surgeries. Now, if you look at one in five corporate employees dealing with fertility issues,
00:55:17
Speaker
And typically a corporate employee insurance, corporate insurance covers only for three lakhs typically, but a major incidents will not, a three lakh will not suffice for a major incidents. It will decide seven lakhs. So how do you bridge all of these white spaces to be able to ensure that individual actually has a peace of mind when it comes to their health? And that is what comes into the picture to be able to bridge all these gaps. Okay.
00:55:44
Speaker
And that is through NBFC partners or? NBFC partners. There you would get a spread on the interest or something like that. That's how you would monetize it. Okay. What is your GMV today? We don't call it GMV because it's not a pass through for us because we collect the money on behalf of the company and then we distribute it out to our service providers because there's a differential pricing. There's a separate price for Apollo.
00:56:10
Speaker
It's a big price, but it's a common price for the company. Last year we did around 40 crores and this year we have a much ambitious target. 100 crores, you want to cross that? Yes, we are on our path to cross that this year.
Funding Journey and Competitive Landscape
00:56:25
Speaker
Is there like a geographical concentration? Do you have more customers in South or North or something like that?
00:56:31
Speaker
Interestingly, we have more customers. So we are based in Hyderabad as a company, but our customers are more in Mumbai, Delhi and Bangalore than in Hyderabad. But if you look at from an employee's point of view that previously employees were co-located around the offices, now there was this
00:56:51
Speaker
We recently came across a city where an employee requested for a service, which was Bihar Sharif. Tier 4 cities were because everybody's working from home now. So that is how we expanded to 200 cities and growing to be able to provide that unified experience.
00:57:08
Speaker
for these employees irrespective of whether they're working from home or office because that's the convenience for an HR. The convenience for the HR when it comes to eating care is one platform, one invoice, one collision point, one vendor, and one unified experience whether across the board, across India.
00:57:27
Speaker
And so you raised that 2CR. Tell me about the funding journey from there on. We raised 2CR. Then we had a near-death situation where we went through dry season and then we raised a small bridge round. Post that very small bridge round to sustain for a few months. Post that we raised our series A round, which was one and a half million, which was in 2019. And in 2022, March, we raised $15 million.
00:57:52
Speaker
So COVID would have really helped your cause, be it in terms of attracting investment interest or even corporates. I guess the whole vaccination rollout is a big headache for a lot of employers. And probably that would have been one of the services on the platform. Yes, it is one of the services. It actually helped us quite a bit. We were the first company to provide cashless COVID vaccination for employees across India, where if you look at it at that point, every company was scrambling to get vaccinations.
00:58:22
Speaker
In fact, we were working directly with the manufacturing partners for the vaccination. But again, the government policies were changing by the week around us. And when it was about to launch, I think the government said it could only be distributed to a hospital's aggregate management.
00:58:39
Speaker
aggregators like us would not get access to the vaccinations we couldn't even buy. So that's when we switched back to our partner network where we are already running credit system. So we went to our hospital partners and said, by the way, we already have this credit system. In fact, we'll pay you advance for
00:58:58
Speaker
It's a number of vaccinations on a rolling basis. You give us a green channel for in-care customers or you give us a dedicated slot for in-care customers and that's how we were able to roll out vaccinations.
00:59:13
Speaker
because of our ability to be the, I would say, the first most advantage in that to be able to provide cashless ability when nobody could figure out. Everybody was doing it more from a reimbursement point of view. We were literally those few months, three months where COVID vaccinations were happening. We were running into calls till 2 a.m. because every company wanted
00:59:35
Speaker
was calling every CEO from the US. We literally people did, figured out our numbers, mine and Madoka's numbers, calling slowly directly. Everybody's like, hey, how can you put us, we are ready to pay you more, just put us ahead of the line. And we couldn't do that because we had to take care of our existing customers first, that we did for new and we had to say no to a lot of customers.
01:00:03
Speaker
But that kind of helped us quite a bit because our existing customers saw our ethical values. Our existing customers saw that we were always ahead of the curve when it comes to employee health. New customers who didn't get access also saw that, hey, we should be their customers because they're doing more for their customers and wish we were their customers at this point. And that kind of helped us improve our brand quite a bit.
01:00:33
Speaker
at that point today. A lot of people within the industry know Econ Cash, who are buyers, and a lot of people would say we are known for our quality, we are known for our ethical approach, and more importantly, we are known for our product-centric approach.
01:00:50
Speaker
So my last question to you, you are in a very competitive space. There's been like an explosion of companies which are going after that same market. Absolutely. And they're like, no more benefits. What do you think you need to focus on to win? What is that make or break activity? Is it fundraise? Is it sales? Is it product? What is it that
01:01:11
Speaker
I don't think there's one. It might sound like a MBA answer, but I don't think there's one silver bullet for this section. You need a great product. All I would say is there's a large market out there. We have a kick-ass product, which is testament to several Fortune 500 companies already using it, which is testament to
01:01:31
Speaker
million and a half employees trusting us with their health and engagement on the product. We have a great team. And now what we need is blitzkilling how we go from 500 to 2,000. Do you have a strategy in mind for that? Like 500 to 2,000? Yeah, absolutely. What can you say?
01:01:48
Speaker
So what we are known, like Estonia, people don't know you can care outside. If you ask a normal individual, do you know you can care? They would say, I don't know. It's only the buyers would know. Within that industry, if you ask HR of a large company, they would say, yeah, I've come across. Now, what we need to do is build a good brand out there, which is synonymous when it comes to.
01:02:13
Speaker
health benefits, which is synonymous with when it comes to employee health, which is synonymous when it comes to trusting Econcare as a brand when it comes to health. So all the 500 companies that we are talking about have been acquired through word of mouth or organic. We don't have a large sales team. Now we are hiring our sales team. Otherwise we had what a six member sales team. So now we are going to emphasize on branding marketing to be able to get a word out.
01:02:41
Speaker
So this most recent round 15 million dollars is essentially growth capital to fund marketing and sales expenses. Correct. So if you leave aside the expense on brand building, are you cash flow positive? So our unit economics is definitely positive. Gross margin is positive. Avida is not positive.
01:03:02
Speaker
Which is because you are spending on marketing and acquisition. We are spending ahead of time. Got it. Okay. But our industry is one such where we don't need a lot of capital, to be honest, because it is unit economic positive. Our CAC is low. Our LTV is high.
01:03:18
Speaker
Yeah, once you acquire a customer, that customer is unlikely to switch over. All the data which resides on you is a massive board. The pain of switching over is extremely high. It's like Salesforce. When somebody buys Salesforce, they don't switch because all the data is on Salesforce.
01:03:32
Speaker
Otherwise they lose all the standardized structured data, the analytics, the risks. So far, we have covered your extensive journey of finding product market fit. And my understanding was that the corporate insurance play would be like a very major part of the journey forward. But I believe you have some updates over there.
01:03:53
Speaker
This was an experiment that we did, honestly, because we also felt and believed that the group health insurance policy is under-penetrated when it comes to small businesses, small and micro enterprises.
01:04:08
Speaker
Over the last six months, we started experimenting with this in January. And for six months, we tried to onboard clients. We onboarded close to 100 companies. A good premium book that we onboarded as a master policy holder. Again, we did onboard them as an insurance company or as a master policy holder. And what we realized is A,
01:04:31
Speaker
The cost per acquisition to acquire these small and micro enterprises was pretty high. One, because there is too much competition in the market with multiple players trying to go after the small and micro enterprises. Two, the paying capacity, again, we got into with this assumption and this assumption was validated. That's why we like to do experiments as a company and we believe in shine fast, fail cheap.
01:04:56
Speaker
approach and the paying capacity of these small and micro enterprises was not there. It was ridiculously low. And three, our ability to upsell cross-sell into these small and micro enterprises was negligible. Again, it goes back to my second point, which is paying capacity. And four, like any small and micro enterprise, extremely price-conscious
01:05:20
Speaker
So they're not value buyers, they're more twice based buyers. So if the policy from someone else is 5000 rupees lower on the overall premium or 10,000 lower, no matter how many belts and whistles you give, they would switch to the lowest price because I've been through that journey even as a small enterprise, right?
01:05:41
Speaker
Yeah, every rupee matters. Every rupee matters. And that's where we realized this is our focus on the side of the business with a high CAC, low outcome is a losing proposition, which is the reason why we decided to move on from one selling IPD insurance as a master policy holder to focusing on small
01:06:03
Speaker
What is this IPD? Sorry, you use this term. IPD is inpatient department, which is hospitalization group health insurance policy to going after the small and micro enterprises. And we did a very thorough analysis of all the data right over the past six months. And we realized we were running faster. We were burning more calories to achieve that, but literally not losing weight by going on the small and micro.
01:06:31
Speaker
Okay, that's a nice metaphor. So you're saying that CAC to LTV ratio, which is I think really the golden metric to see how investable your business is. That's what most VCs like to look at. So that ratio was very lopsided. The acquisition cost was high. The long-term value was low because limited opportunity to sell premium features and so on. So what is your main stay then?
01:06:53
Speaker
So we have been pioneer in when it comes to OPD. When I say OPD, it is anything apart from hospitalization. So diagnostics, teleconsultation, care management programs, gyms, e-pharmacy, all of this, the benefits that the company provides to employees. We've been phenomenally great in terms of our network, in terms of our technology, in terms of our offering as well, because of our breadth in terms of the companies that we
01:07:22
Speaker
cover on the OPD front, from the Microsoft S&P Global to KPMG to BlackRock to LinkedIn, Nike, eBay, Escorts, Kotak, quite a few companies that we covered on the OPD front, because of which we have a very strong footing. So we decided to play to our strength and we're now partnering with companies that are actually providing hospitalization cover rather than competing with them.
01:07:50
Speaker
Interesting. So you are the health buddy for employees of these companies, like you mentioned, Silicon or Nike and so on. Correct. So for their employees, you are the health buddy. The first place they will go to when they have any need, be it I'm down with a flu or be it that while I need emergency service, ambulance service or any health care need.
01:08:12
Speaker
So this, when a company is frauding pharmacy, this takes care of that medical reimbursement. Like there's that component in your salary to save tax, which is the medical reimbursement. That is only, that's gone, that's gone long ago. So that 15,000 rupees is gone, but there is an annual, there's an annual health checkup that gives you a sectional ADD tax. So that's what it takes care of. So there are companies, for example, I'll just again, when we say innovation, when it comes to OPD.
01:08:39
Speaker
So today, if you were a company, what you would do, Akshay, is say, as a liberal company, as a pro-employee company, you would say, hey, anybody who wants to go to a gym, I'm happy to reimburse your gym bills. But what ends up happening, let's say you are in a company with 5,000 employees. Everybody at the beginning of the month will show you a bill. They collect the money. Not that they're doing any fraud or not, but they hardly go to the gym.
01:09:06
Speaker
Yeah, we spoke about this. The check-on utilization is not there. So you are instead able to convert this into a paper visit. Paper visit as a pool. So these are the kind of innovations that we did on the OPD front. That's our stronghold. We want to make India healthy one year at a time.
01:09:25
Speaker
Today we are close to a million employees and we believe we have not even scratched the surface because as of last year there were 73 million hundred employees out there and we're just capturing only a million employees. So the journey is much longer and much bigger.
01:09:43
Speaker
And that brings us to the end of this conversation. I want to ask you for a favor now. Did you like listening to this show? I'd love to hear your feedback about it. Do you have your own startup ideas? I'd love to hear them. Do you have questions for any of the guests that you heard about in this show? I'd love to get your questions and pass them on to the guests. Write to me at adatthepodium.in. That's adatthepodium.in.