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30 healthcare companies pay an average of $300,000 per year with an acquisition cost of just $75,000 per customer, leading to a payback period of 3 months
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Funding as of 2019 was $11.9 million and poised to attract another $10 million
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Burning $100,000 a month in capital but ready to turn a profit at the end of 2019
Jay Ackerman was not a founder of Reveleer. Instead, he joined the company at a time when they were looking for some serious growth.
And that’s what he gave them.
Brought on in 2016 as President and CEO, under Ackerman’s leadership this software in the healthcare space has seen some really fast expansion and is poised for easy double-digit growth in the early 2020s. In late 2019, Ackerman sat down to chat with Nathan about where his product fits in in the wide world of enterprise-level SaaS.
Who They Are and What They Do
The name “Reveleer” is actually a product of a rebranding workshop in 2016, where the previously-named Health Data Vision, Inc. decided to shake up the company’s whole image.
Ever since 2009, though, they have been offering cloud-based data management applications to government-funded healthcare providers in the United States. Reveleer’s potential clients are any of the healthcare companies currently cooperating with Medicare, Medicaid, and the ACA, so if you’re covered under an American healthcare plan, there’s a good chance you’ve indirectly interacted with Reveleer before.
“The beauty of our market is that it’s easy to identify all the customers that we can sell to,” says Ackerman. Essentially, they help insurance companies track information better on the members signed up with their plan.
A Complex Sea of Regulation And Communication
Why, you might ask, don’t the insurance companies have the information they need? After all, they’re using Reveleer to gain data about their own clients!
Since the healthcare system in the United States operates with private doctors, private hospitals and private insurance companies, not every doctor is going to share all of their patient data with everyone else. And even if they did, it would be a nightmare trying to get each database to perfectly sync with the others.
Reveleer’s cloud software makes it easy for insurance companies to communicate with hospitals and doctors, collecting and cleaning the claim and demographic data to produce more accurate risk adjustments in far less time than otherwise. After all, insurance is all about managing risk, and a company that can help expedite that process could be worth its weight in gold.
The Pricing Model
There are a couple of different product line pricing strategies in play at Reveleer.
First, there’s a typical enterprise scheme, where there’s a single flat rate able to be interacted with by as many users as needed. That’s good for enormous companies with national reach like UnitedHealthcare or Anthem Blue Cross.
If needed, Reveleer can also work to create an individual pricing plan that more accurately reflects how many customers (ie. members covered under the insurance) will have their data collected by the software.
SaaS and Services – Netting $300k/Year Per Client
At the end of 2019, Reveleer had 30 enterprise clients, and they were paying $300,000 each per year to use the product. That was 6 more than the previous year (keeping in mind the 10% churn) and there’s a surprisingly low customer acquisition cost: roughly $75,000 including commissions, marketing, trade shows, and so on.
Of course, in the United States healthcare information is treated very seriously, and the sending and saving of such data is very highly regulated with regard to patient privacy. Therefore, there’s usually an additional $200,000 per year per client for training and other servicing.
Remember, Ackerman was hired specifically because he had experience scaling businesses. He had been a chief revenue officer before, and liked the company so much he was willing to take a significant salary cut in return for around 10% of the company in equity.
Clearly, he made the right decisions! Thanks to the growing customer base, he expects the cost per customer to shrink and the overall revenue to continue growing significantly from 2019 to 2020.
How Ackerman Manages Reveleer’s Millions in Funding
Having raised $2.8 million dollars before Ackerman showed up, total funding now reaches more than ten million dollars with another ten million in progress. What spurred such a rapid influx of investment?
A great deal of that goes into product development. It simply requires a lot of capital, nearly $100,000 dollars a month, to develop software at this kind of national scale. Particularly when you consider that in addition to risk adjustment, Reveleer is also offering quality improvement and audit protection platforms.
“We’re also looking at some acquisition opportunities, and as we move forward with that, it would be nice to have a banking partner on our side there.”
And that $100,000 a month being burned is on its way out as well. As 2019 came to a close, Ackerman predicted that the company would be cash-flow positive for the fourth quarter.
The Makeup of Reveleer – Only Two Sales Reps
With enterprise software development at that scale, you might expect Reveleer to have a team chock-full of the best engineers available. Not quite – only fifteen of the 75 employees are engineers.
Perhaps even more surprising is that the revenue growth and expansion has so far been accomplished by a team of two sales representatives. Naturally, with a relatively small customer base of huge insurance companies, everybody in a public facing role (including the C-suite) does some sales here and there.
The bulk of the employees, in fact, are members of the operations team, supporting the new clients on contract for the coming years. These fifty people on the ops team are the ones actually calling up the doctor’s offices and getting the medical records to put in the centralized databases for the insurance companies.
In A Nutshell
Brought in to Reveleer around 2016, President and CEO Jay Ackerman wasted no time before bringing in serious capital to fund new software development and greatly expand the product support base.
Their customers in the health care enterprise market grew by more than 25% last year, and through the next few years they are hoping to make some acquisitions and continue to see very impressive growth numbers.
About the CEO Jay Ackermann
Favorite Business Book: Keith Ferazzi, Never Eat Alone
CEO he follows: John Donahoe at Nike
Online tool: HubSpot
Hours of sleep per night: 6 and a half
Family situation: 52 years old, married with two kids
Advice to 20-year-old self: Find a great mentor, don’t be afraid to join a large company, and manage your cost structure. It’s hard to peel back costs after they’ve crept into your life.
Data
Revenue
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018 – $6.8 mm [The company posted 112% three-year growth] (mobihealthnews)
2019 – $10.2 million
2020
Customers
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018 – 24
2019 – 30
2020
Funding
2009
2010
2011
2012
2013 $2.8M (hitconsultant)
2014
2015
2016
2017 $9.1M (builtinla.com)
2018
2019 $18M raised between 2009 and 2016 (getlatka)
2020
Sources
https://www.builtinla.com/company/health-data-vision
https://getlatka.com/companies/reveleer
Notes
Rebranded from Health Data Vision in 2016
Author:
Yassir Sahnoun is the founder of YassirSahnoun.com. He helps SaaS companies like Castbox and FluentU attract sales using content strategy, copywriting, blogging, email marketing, & more. If you want to up your content marketing game, you can schedule a free discovery call with Yassir by clicking here.