The global healthcare market is expected to touch $2 Tn in 2018, as per predictions by consulting firm Frost & Sullivan. Despite its unprecedented growth in the recent times, the healthcare sector is still largely dependent on outdated, inefficient methods of data collection and processing. Fighting these problems in the US is a three-year-old Indian startup: Innovaccer.
Striving to bring efficiency to the overall healthcare system, Innovaccer is a big data SaaS startup founded by Abhinav Shashank, Kanav Hasija and Sandeep Gupta in 2014. The Silicon Valley and Noida-based company is focussed on helping healthcare organisations accelerate innovation by making powerful decisions based on key insights and data-driven predictions.
Its flagship product, Healthcare Data Platform, has been used by more than 10,000 healthcare providers, affecting the lives of over 10 Mn patients in the US, as of February 2018. The 500 Startups-incubated company, having clocked 400% YoY revenue growth within four years of its launch, is now leveraging the $9 Bn healthcare analytics market to evolve into a $100 Mn company.
During an engaging interaction with Inc42, co-founder and COO Sandeep Gupta shared some valuable insights into the startup’s initial journey and its plans to reach breakeven by 2019-end.
The Growing Necessity Of Structured Data Analysis And The Birth Of Innovaccer
Innovaccer was founded by three friends. While Abhinav and Kanav were batchmates at IIT Kharagpur, Sandeep and Abhinav met while working at diversified industrial manufacturing company Ingersoll Rand. It was during that time that Abhinav and Kanav got an opportunity to work on a data analytics project conducted by Wharton and Harvard University.
The project: a basic research of how large amounts of data (what we call big data) can be compressed and studied and the insights that can be derived from the same. The idea was simple: to leverage big data and machine learning to derive particular insights in different areas of interest and research and give the output in product form.
As per Shashank, “Because it was an important project and big data was relatively new, the project received a tonne of visibility. We were on NBC, MSNBC and a bunch of other networks.” Soon, universities like Stanford, MIT and Harvard started taking interests in the duo’s big data research findings.
That was what got the ball rolling initially. “They decided to take their idea a notch up. I was brought onboard, and eventually in 2014, Innovaccer began its operations from a small basement which couldn’t accommodate more than ten people,” said Sandeep.
While the trio realised that data across all industries was growing and it would soon assume a central role in developing smart strategies, they also came upon one big problem. This data was distributed across multiple large silos and had to be combined, crunched and analysed, in real-time, efficiently to deliver an in-depth understanding of the looming problems impeding innovation. And that’s exactly what Innovaccer’s Big data platform enables today.
Healthcare Data Platform: A Comprehensive Big Data Repository
Data is ubiquitous. Today, more than 2.5 quintillion bytes of data are consumed every day in the form of emails, videos, images, tweets and content, among others. Despite its growing necessity, data, especially in the healthcare sector, has remained largely unstructured.
Furthermore, data, once culled, is impossible to manually analyse for reasons pertaining to error, time, bandwidth and efficiency. This is where Innovaccer’s innovative solution Healthcare Data Platform makes a mark. A Hadoop-based Big Data repository that can run state-of-the-art analytics, it, essentially, collects raw data scattered everywhere, integrates it, normalises it and parses it through its algorithms to provide trends and predictions in a structured, consumable and ready-to-use manner.
The initial response, according to Sandeep, was so phenomenal that at the end of the first year, the top 18 research institutions among the top 65 in the US had reached out to Innovaccer and given the team various projects to work on – in fields as varied as retail, finance, real estate, healthcare and entertainment.
However, the founders soon realised that, in order to create a billion-dollar organisation, they will have to operate in an area that is small enough to drive focus, yet large enough to create an impact. That’s when the data analytics startup decided to focus solely on the healthcare market.
Currently, Innovaccer’s core product is used by healthcare institutions to deliver efficient care in a cost-effective manner and ensure high patient satisfaction.
Leveraging SaaS And Big Data To Bring Efficiency To The Healthcare System
The US has extensive electronic medical records of patients, unlike India which is still lagging far behind in terms of historic data. This made Innovaccer’s initial tasks significantly simpler. However, as explained by Sandeep, most of the healthcare settings in the developed world are using multiple variants of data repositories from different vendors which makes it tough to create an integrated data infrastructure.
This significantly reduces the operational efficiency and patient-interaction time as physicians have to constantly navigate through the complex workflows. With the help of its integrated platform, Innovaccer has created a comprehensive database that includes information such as patients’ clinical data, hospital operation processes and insurance claims.
How does Innovaccer help?
- Helps recognise high-risk patients that need attention and offer actionable insights at early stage.
- Provides data-backed intervention insights to healthcare providers that can lead to better care outcomes and bring down the cost of healthcare.
- Additionally, in the health insurance segment, claims are one important area that could benefit greatly from data analytics. Coupled with the fact that healthcare in the US is hellishly expensive, often running into thousands of dollars if you’re not insured, the sector poses an enormous opportunity for startups like Innovaccer.
As stated by the founding trio, Innovaccer’s focus is on harnessing the power of big data to improve the outcomes of disease metrics and patient prevention through large sample sizes of population. Furthermore, it tries to improve and predicate doctor efficiencies in order to ensure optimum patient care within a given hospital, or network of hospitals.
“As you know heart attacks go undiagnosed in the first thirty minutes of a patient showing symptoms and getting the medicine right in those first few minutes is crucial to saving the patient’s quality of life. Also, heart attacks among other ailments, cost about $500K to be treated. We want to look for ways to bring this cost down,” averred Abhinav.
On how the company is leveraging SaaS, co-founder and COO Sandeep Gupta added, “Our innovations include building code-free, visual data ETL smart pipelines that enable high quality and reusability. This data is hosted on a big data infrastructure that enables real-time insights for physicians and care management teams. All this is enabled in a SaaS infrastructure that ensures that all our learnings are made available to all our customers in real time.”
$36 Mn Funding, 10,000+ Providers, 10 Mn Patients
Growing by leaps and bounds, Innovaccer’s formidable presence in the US market has enabled it to raise over $36 Mn in funding across multiple rounds from a clutch of investors, including Westbridge Capital, Lightspeed Ventures, among others.
Originally started with a capital of $30,830.65 (INR 20 Lakh), the SaaS firm picked up its first institutional funding led by people like Rajan Anandan, Beenos Group CEO Teru Sato, among others. Later, in August 2016, it secured $15.6 Mn Series A led by Westbridge Capital Partners, with participation by other angel investors.
With a workforce of around 250 people, Innovaccer currently has a prominent presence in a number of regions in the US, including San Francisco, San Diego, Dallas, Florida, New York and Chicago.
Overall, it streamlines data integration and care delivery for over 500 practice locations. The big data analytics company boasts more than 25 healthcare-focussed registered accounts, with over 10,000 providers leveraging its solutions at various institutions, government organisations, and several corporate enterprises. Sharing more insights into the startup’s remarkable growth, Sandeep said, “With over 10 Mn patients, we have saved $155 Mn and targeting a billion dollars of savings in the year 2018.”
How Innovaccer Overcame Challenges To Clock 400% YoY Revenue Growth
Despite the initial success, the founding trio of Innovaccer had to overcome several challenges while starting out. The first and foremost challenge, according to Sandeep, was to find the right product-market fit, validate their hypothesis and find an enterprise customer who would pay for their product.
From catering to diverse sectors like finance, retail and entertainment, the founders decided to narrow down their focus to healthcare. The turning point for the startup came when an unnamed institution (top-tier) approached Innovaccer to create insights based on historic, clinical data of patients to identify trends that could lead to proactive prevention of chronic diseases such as diabetes, heart attacks, blood pressure etc.
The shift in its focus, Gupta recalls, was quite a hardship in itself as they had to let go around 60% of their revenue in 2016. However, soon enough, the company started gaining momentum.
Among its current hurdles is the problem of scaling up, while also maintaining the growth rate and the underlying culture. These, according to the team, are essential for any SaaS company to reach $100 Mn in revenue.
Innovaccer is currently in the process of undergoing this transformation, with a focus on bolstering product, delivery and customer success. Ultimately, the big data SaaS startup aims to transfigure into a $100 Mn organisation by 2020 and also looking forward to breaking even by 2019-end.
Sandeep attributed the growth in its revenue to the company’s undeterred focus on providing a single, yet robust, product to a single problem set. He explained, “By leaving 60% of our revenue on the table, we allowed ourselves to go much deeper, hire subject matter experts, speak the customers’ language, and validate product-market fit (PMF) rapidly.”
Also, as per the company’s COO, it is imperative to charge customers for proofs-of-concept (PoCs), even if it is a small amount. “Unless they put money on the table, customers will not be as serious as you are, which significantly reduces your chances of having a successful PoC. We make sure that we are consistent with the need of the customer.”
On the subject of competition, Sandeep replied that the dynamics of the US healthcare market is quite different from that in India. Due to its transitional nature, the market there has either a major incumbent or a new-age vendor in the form of competition.
What sets Innovaccer apart, as per Gupta, is that it was the first to deliver plug-and-play connectivity with pre-built connectors. This, in turn, makes sure that the data analytics company’s customers have access to real-time, state-of-the-art analytics, which in turn puts Innovaccer ahead of its competition.
According to an IBEF report, the overall Indian healthcare market is estimated at $100 Bn. It is expected to touch $280 Bn by 2020, growing at a CAGR of 22.9%. Inc42 Funding Report 2017 states that healthtech startups in India cumulatively raised more than $338 Mn across 111 deals in 2017.
The digitisation wave has helped greatly in increasing the pace of innovation in the healthcare space. 2017, for instance, saw an extensive use of artificial intelligence and machine learning by healthtech startups for accurate screen testing of diseases like diabetes, breast cancer, TB, etc. Additionally, as we move towards prioritising quality of care over plain numbers, predictive data analytics in healthcare has become all the more important.
Data-driven healthcare in India may still be quite nascent, but it’s definitely catching up. Both the Indian government and private institutions have already started moving towards Information Management Systems (IMS). Furthermore, healthcare was one of the key focus areas in this year’s budget, with the government increasing healthcare spending by 11% to $8.2 Bn in order to bridge critical health infrastructure gaps.
With the introduction of technology and a right infrastructure in place, the Indian healthcare market too can tap the potential of data. Big data analytics will find takers in this space as well, and new innovations will completely reshape the landscape. Data synchronisation will not only make the processes fast, but it could also be instrumental in providing quality care. Linking social determinants with care processes in India can have a drastic impact on many pockets with below par health standards.
For Innovaccer, the market poses an enormous opportunity. As it inches closer to gaining a stronghold in the US healthcare segment, the big data startup needs to expand its horizons by tapping other emerging markets across the globe. However, given that the healthcare analytics sector is still largely fragmented and unorganised, whether Innovaccer will be successful in becoming a $100 Mn company will be interesting to watch.
Update 1: November 28, 6:49 pm
Some figures in the article have been removed at the request of the startup’s founders.