SaaS Interviews with CEOs, Startups, Founders
HealthTech Hits $1.4m ARR in 12 months with genius medicare reimbursement model
28 Aug 2022
Chapter 1: How did HBox achieve $1.4 million ARR in just 12 months?
And so if you're doing 1.4 million in AR today, what were you doing exactly a year ago? Do you remember?
Yeah, it was around 100K.
You are listening to Conversations with Nathan Latka, where I sit down and interview the top SaaS founders, like Eric Wan from Zoom. If you'd like to subscribe, go to getlatka.com.
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He's a serial entrepreneur, currently the founder and CEO of HBox, a virtual first care platform company that helps customers in eight US states and he's growing quickly. They've participated aggressively in the Indian investment ecosystem, both as a venture partner in Arali Ventures and as an angel investor. Banu, you ready to take us to the top?
Yeah, sure. So it's basically my background is I'm... Well, Banu, let me lead here.
Okay, let me set you up for success with my audience. So guys, first off, if you want to follow along, the link is hbox.ai. And so Banu, start with the platform, right? So when you say building virtual first care platform, what does that mean?
So we are an end-to-end platform and services company, and we serve clinics across eight states in U.S. where we not only provide the hardware and software technology, but we also provide end-to-end care delivery services like clinical care coaches with the billing infrastructure and so on.
the basically what we do is we work with uh clinics mostly specialty clinics like pulmonologist cardiology what do you mean sorry bonnie you keep using the word clinics i don't understand so they are outpatient healthcare providers like if you these are individual clean practices or group of physicians come together and create a legal entity that work with the hospital systems
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Chapter 2: What does building a virtual first care platform involve?
Time for manufacturing.
And how is it $200 landed? I mean, there's an iPad I see in this package. I know iPads just by themselves are five, six, 700 bucks.
Yeah. So these are, it looks like an iPad. Those are Android tablets, which are customized for HBOK. So they come with our built-in software. So they are not an iOS platform. They are an Android.
Okay. Same question though. An Android tablet is going to cost just by itself more than 200 bucks.
Correct. That's where I meant that we tap into the, my previous venture was in the same space. So we work with contract manufacturers in China to bring down the cost.
So you can get, if you purchase three, just talk about Android tablets for a second. If you purchase 3,000 units and commit to 3,000 units, you can get your cost for those Android tablets under 150 a unit. Got it. That's right. Oh, wow. Okay. Got it. Okay. So your hardware is 200 landed. That makes a lot of sense. And then what do you lease?
You mentioned you lease it back to your customers, the physicians and clients. What's the monthly lease payment?
So we don't, let me give you, walk you through our business model, right? We don't lease hardware separately. What we do is we charge per patient on a per month basis, anyway, between depending on the volume of the clinic, anyway, between 60 to $79 per patient per month.
Okay. And, and what does that per patient is that number of patients in the system? Is that just the patients that visited that month?
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Chapter 3: How does HBox's subscription model work for healthcare providers?
But Bhanu, that's not. So how did you get the first customer?
That first customer was through a connector for my previous venture. And we had the first three customers was through our network. And after that, those customers have referred other customers and those customers have referred other customers because the value and the business model from our perspective drives that kind of referral program.
And if there's 1,800 in the wild today kits, devices, again, you charge 60 to 80 per month there. Where's most of your revenue growth coming from? Is it one physician getting more clients or is it adding new physicians altogether?
It's a combination of both. What happens is once we add what I call as clinic can consist of multiple physicians within a clinic. Once we add a clinic onto our platform and a provider or a physician onto our platform, It takes at least, continues to grow the patient because as you said, in your cancer's example, there are 10 patients visited this month, next 10 patients visit next month.
So that's an engine that gets kick-started. And then we add other clinics. So it's a combination of clinics and providers on our platform, which will continue to grow, as well as adding new clinics and new providers. So we have a strong pipeline, as I said, the referral network kicks in and they refer more and that adds on to our top line.
One way to ask this question is to look at your net dollar retention. So what is your net dollar retention the past 12 months?
It is pretty much, we haven't lost a single client so far. Because it's very simple because our model is, I would say still we are early on in the innings because we are in business only for last 12 months. And so it's very hard to compute those numbers yet. But based on our retention so far, we haven't lost a single customer yet.
Yeah, Bhanu, so net dollar retention is really asking, it's a combination of have you lost any, but also how much have you upsold? So when you look at the customers that you're working with exactly one year ago, what percent have they expanded by?
Oh, sure. So that's been phenomenal, right? So it's been like, typically the way we measure our businesses, if you sign up a physician and if they have a thousand patients, in their EMR system for last one year. And it takes close to a year for us to enroll their patients, 26% of that.
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Chapter 4: What hardware and software does HBox provide to clinics?
We are around 30 people. Three zero? Three zero.
And how many engineers? Around nine people. All are in India. Our R&D team is in India, but the rest of the team, what we call as a customer success and care coaches, which are medical clinical staff are all based out of US.
Yeah, very cool. And do you have CAC? Are you paying or doing any paid spend to get customers?
No, this is so far we have been lucky. As I said, we are going through referral programs and we just basically the existing customer referring other physicians to get onto our platform.
And what dollar volume of Medicaid or Medicare reimbursements have you processed personally through the system?
So, so far, right now, as I said, for us to generate 120K per month, so we are processing close to 300, 350K per month of claims.
Okay. Are all those $350,000 in claims monthly getting accepted and reimbursed? Yes.
Yes. That's the reason why we get close to half of it as our invoice.
Okay, got it. Very interesting. What's the total opportunity here? How many patients are at home where clinics and physicians have to give them this hardware device?
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