SaaS Interviews with CEOs, Startups, Founders
945 He's Democratizing Health Data Across Big Pharma With 200 Customers, $3.5m Revenue
24 Feb 2018
Chapter 1: What is the main topic discussed in this episode?
This is the Top Entrepreneurs Podcast, where founders share how they started their companies and got filthy rich or crash and burn. Each episode features revenue numbers, customer counts, and other insider information that creates business news headlines. We went from a couple of hundred thousand dollars to 2.7 million. I had no money when I started the company.
It was $160 million, which is the size of many IPOs. We're a bit strapped. We have like 22,000 customers. With over 5 million downloads in a very short amount of time, major outlets like Inc. are calling us the fastest growing business show on iTunes. I'm your host, Nathan Latka, and here's today's episode. Hello, everyone. My guest today is Gunjan Bhardwaj.
He is the CEO and founder of a company called InnoPlexus. Now, he's got a lot of experience. He's been an advisor to government in big pharma and future management and in digital. He teaches at B schools as a keynote speaker and has published in many scientific and management journals, co-authored a book, and focuses and writes for editorial boards of scientific journals.
Gunjan, are you ready to take us to the top? Yes. Good. Okay, tell us what InnoPlexus does and what's your business model? How do you make money? Enoplexis crawls the entire digital universe of life science and then meshes this external information to draw out relevant insights and to provide continuous decision support to decision makers in hospitals and big pharma companies and biotechs.
So who at a hospital are you selling to? So some of the large hospitals in Europe, specifically who treat diseases such as cancer, Alzheimer's, Parkinson's, and so on. And so I'm at a European hospital. I have Parkinson's. Where does your technology come into play? So everything that's happening in the external research in Parkinson's, the latest research that's published each single day,
All the clinical trials that are happening out there, everything that's being presented in posters and scientific congresses, press releases of pharma companies, working papers of large research centers, new patents, everything is extracted and analyzed in real time. And one could get as a physician, a real time overview of the state of the disease and different treatment therapies.
Okay, so you're not selling a piece of hardware for a hospital or anything. You are taking all the intelligence and research and you're selling back content, essentially. Exactly. We are democratizing data. Okay, so how do you make money? That has been a monopoly of large data service companies manually curating data, hiring thousands of analysts in India and China.
We are replacing all of that using AI leveraged algorithms. Okay, and how do you make money? Are you selling a subscription model or what? We license our platforms and products. What does that mean though? You're licensing the tool that captures the information or you're licensing just the content itself? We are licensing the tool as well as the content.
Okay, so what does the average customer pay to get access to the tool? Uh, it's substantially cost effective compared to the extent data service subscriptions that are available by large data companies. Okay. Yeah. So my question though, is on average, what are they paying you for access to that software?
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Chapter 2: What is the main topic of InnoPlexus and how does it operate?
And B, if you would input more relevant data into these computational engines, you would get more relevant insights that would really help you in decision making. So Gunjan, have you bootstrapped this company or have you raised capital? Yes. So we bootstrapped the company for the... for the first five years.
Chapter 3: How does InnoPlexus provide insights to hospitals and pharma companies?
And then last year, we raised our first round. Which was for how much? It was, till now, including pre-series A, we have raised around $10 million. Okay. But just to be clear, you were bootstrapped up until 2016, your first five years. Okay. And how did you fund the company while you were bootstrapped? Did you put a bunch of your own money in?
We invested ourselves, we sold projects, and we pushed, we pulled in the cash that came in from the projects into developing products. So it was a lot of consulting, professional services stuff. Okay, how much of your revenue now, though, percentage-wise, is true SaaS revenue, monthly recurring revenue? 85%. Okay, so significant. Yes. Yeah, and what's your team size to date?
We are around 140 people. Okay, and where are you based? We are based out of Frankfurt, Germany, and Pune, India. Germany and India. Yeah, and we recently hired the CEO for United States and are going to have our first office in New Jersey. That's wonderful. Congratulations. Thank you. And what are you at today in terms of total customers paying for the platform?
So we have around six big pharma clients for various therapeutic areas. We also started some pilots in the financial services space, and we are trying to scale up the financial services business as well.
Okay, so when you say those six big pharma companies, I guess maybe the right question to ask is not how many companies, but how many people inside the companies are using your tool pretty aggressively? So you'd have upwards of around 200 users. I see, across those six customers. Okay, got it. And walk me through how you got these customers.
You know, the healthcare sales, or the health space sale is not an easy one. So how are you winning these contracts? So I think the first sale is always the most difficult one, but then you start with a POC. And you prove your worth, your technology, your edge.
And once that customer sees the value in the technology and in the offering, it scales up the offering to a more number of users to different therapeutic areas. Once you have the first big pharma, the second comes relatively easier and so on and so forth. And what... How did you do that? I mean, did you already know these big pharma companies from your consulting days?
So, of course, I had an understanding of how they take, how they are organized, what kind of needs that they have. But a product sell approach was very different to what you do in consulting, which is more of a concept selling. So it was a hard sell in the beginning.
But again, we tried to understand the problem and said, basically, we are going to invest our resources and try to find whether we could find a solution to this problem. And once we were able to prove that, then the company accepted us as a partner in scaling that POC. Guys, big news. Last month was a huge month for the company I recently acquired, which was www.thetopinbox.com.
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Chapter 4: What is the business model and revenue structure of InnoPlexus?
a purpose. And our purpose is to really help pharma companies fight the biggest challenges in terms of oncology, neurodegenerative diseases. Come on, Ganjar. I do believe you, but I also know you're a capitalist like me and you like making money too. Yes, we like making money.
We want to be successful, have the leverage, but at the same time also address the purpose, which is to democratize data and And truly, truly strive to get better patient outcomes, healthcare outcomes. Yep. What is it costing you to acquire one of these new customers?
See, in our space, there are, once you get the first customer and the word goes out, and if you are covering the entire universe, you have a good understanding of business needs of the clients. it is relatively easy to replicate the same at a newer client. Of course, we are working on some novel solutions partnering with- Well, no, Gunjar, I get all of that. But as of right now, what's it cost?
So like include any paid marketing, Google, like things like that, any travel for your salespeople, salespeople salaries, like your fully weighted CAC, what is it? So of course, you have a commercial presence, et cetera, but the cost of sales is marginals. Like how marginal? It's like for any SaaS company that would be comparable. Well, anchor that for us. What do you mean any SaaS company?
So are you saying your lifetime value to CAC ratio is three? Somewhere around that. Okay, but you just told me your churn is nothing, which means lifetime value you could argue is infinity. So how do you decide what lifetime value is? Lifetime value, typically, you take 10 years. Why do you typically take 10 years? Five to 10 years, because it's a rapidly changing technology landscape.
There are new companies emerging. So you really need to invest a lot in innovation. We have an innovation team. Gaurav Tripathi, the CTO and co-founder, heads technology and innovation at Innoplexis. We have 15 patent applications as we speak. and that number is going to increase next year substantially. So yeah. So am I understanding you correctly?
You said at a minimum, you assume lifetime value is five years on anyone who starts paying for one of your seats. So one seat, those people are paying. So that's like 60 months, basically five years. And we talked earlier, one seat pays, you call it 10 grand a year.
So right there, lifetime value, you put it at like a quarter of a million bucks, which means you can afford to spend, call it 75 grand on acquisition to hit the three to one ratio. Where are you spending that 75 grand typically? So to building commercial presence, understanding... What does that mean though, building commercial presence? I don't understand.
So one would have to... It's not a one-to-one sell that you take a product and you just plug it in into any big pharma company. You have to understand what the business imperatives there are, what are the biggest challenges. And you need to position the products and the technology that you have to solutions that would solve those problems. And that requires understanding of those problems.
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