Reveleer Went $25M to $100M in Two Years. Only 10% of It Was Bought
Six years to get from $1M to $25M. One year to get to $50M. Jay Ackerman explains how two small acquisitions moved the addressable market tenfold.
On this page
It took Reveleer six years to get from $1 million to $25 million. It took one year to get from $25 million to $50 million. Jay Ackerman spent the year after that telling anyone who asked that the company would do $100 million, and then said it on stage with the year almost over.
Six years from one to 25, one year from 25 to 50, and this year we’ll go from 50 to 100.
Jay Ackerman, CEO, Reveleer
The thesis. Roughly 10% of that $100 million is acquired revenue. Reveleer did not buy its way from $50M to $100M — it bought two small product gaps that let it sell a bigger solution to the same buyer, and the organic line did the rest. The acquisitions moved the total addressable market from $2 billion to $20 billion, which is the number Ackerman actually cares about.
What Reveleer sells
Value-based care means paying providers for whether patients get better rather than for each visit. Reveleer sits between the two sides of that arrangement: payers (insurance companies) and risk-bearing providers (health systems, hospitals, doctors carrying risk).
The product problem is that a patient’s clinical history is scattered across urgent care, pharmacies, labs and out-of-network visits, and none of it is consolidated.
We identify a geography based upon where you are, how many miles, we’re going to sweep all the care settings that exist, pull that data in. We can capture incremental data on 90% of the patients that run through our platform. But the challenge is when you get all that data, you better be really good at mining it, because you can have thousands of pages.
Those thousands of pages become two or three recommendations surfaced in the doctor’s EMR during a fourteen- to sixteen-minute visit, with a click-through to the exact record the conclusion came from. Reveleer ingests close to a billion pages of medical records a year — about 3,000 pages a minute.
Both halves of the ACV story
The 2019 conversation and the 2024 one bracket the change precisely. In 2019 Reveleer had about 30 customers at roughly $274,000 of annual contract value and around $8 million of SaaS ARR with another $2 million of professional services on top. By 2024 it is about 80 customers approaching $900,000 each.
Nearly triple the customers, nearly triple the contract value. Ackerman credits both product innovation and the acquisitions, and is specific about how the pricing model changed underneath.
A prepaid units model — “like a cellular plan.” A health plan with 100,000 members might pre-purchase 25,000, then get billed for overages.
Per member per month, billed quarterly. The same model health plans and health systems already run their own businesses on.
The M&A rule
Latka puts the standard trap to him: founders build a beautiful model where the cross-sell works, the cultures match and the tech stacks line up. Ackerman’s framing of what makes an acquisition safe fits in one sentence.
Our acquisition strategy is centred around identifying product that rounds out the solutions that we’re offering today. So we’re effectively expanding what we can offer to the same buyer. We’re not asking our sales team to go learn the buying pattern of a new executive inside of a health system that has nothing to do with the people that we’re currently talking with.
- Partner first. Both acquired companies were existing partners. “Every company that’s in our pipeline, we’ve built relationships with over a long period of time.” Up to September 1 that year, the corporate development team had talked to 60 unique companies.
- Never for financial engineering. “You can’t do it for financial engineering purposes. Your numbers might look nice for a little while, but it’s going to break down.”
- Buy the playbook once. Reveleer brought in a Tennessee integration consultancy for the first deal to build workstreams — day-one finance and HR, then sales and marketing, then a slower product and technology roll — and reused it on the second.
The first acquisition, Dynamic Healthcare in early 2022, was a cash-generating business at about $7–8 million of ARR that had been flat for a long time, friends-and-family backed, with fewer than thirty people and a data-centre-hosted stack that Reveleer migrated to AWS. The second, MD Portals in 2023, was a team under fifteen that moved Reveleer from payer into the provider space.
Culture was the harder integration, and Ackerman does not dress it up.
In the first twelve months of owning them we sold more new business than they had sold in the prior five years. All of a sudden we were asking everybody to run a lot faster. For some, they weren’t used to that, some didn’t really want to do that — we had some people who self-selected out.
$65 million of debt, no equity
The round most people assumed was equity was not. Reveleer raised $65 million from Hercules Capital, all debt, aligned on ARR, to fund acquisitions — on top of prior debt of under $2 million.
Now that our business is generating cash and we have really good understanding of the unit economics of our business, we wanted to raise a debt facility to support M&A.
Latka reads Hercules’s own public filings back at him: a target weighted average yield around 15.5%, headline rates near 11%, exit fees of 2.55% and 3.45% on comparable deals. Ackerman will not confirm the rate but says it is “in the range,” with the all-in cost “in the lower end of the range” — and explains what he actually negotiated for.
What was most important to us is the total interest expense that we’re going to pay, with front-end fees, back-end fees, carrying fees and straight borrowing costs. That’s number one.
The reason the terms were available at all is the profitability. Reveleer finished 2023 EBITDA and cash-flow positive at just under a 10% margin, on revenue that had doubled. “There are not a lot of companies right now that are growing, doubling and increasing profitability,” he says, “and so doing both of them puts us in a position where we can ask for more favourable terms.” The debt structure has since become the default: the first acquisition was 75% cash and 25% equity, the second split evenly between equity and debt, and the third was to be funded entirely by debt.
The parts that nearly did not survive
Ackerman’s stage version of the story includes two moments the revenue ladder hides. In 2018 the company could not make payroll.
We were stuffing some invoices in drawers and we were paying the loudest person that was calling. In 2018 I put that house up as collateral when we couldn’t make payroll and we went for a debt financing just to bridge us. And that’s what you do when you believe in the vision.
The second came later, and is a customer success failure rather than a cash one. A lighthouse customer got noisy, Reveleer read it as being overly demanding and pushed price higher, and on 3 July — the day before the holiday — the notice of non-renewal arrived.
It almost led to 30% of our company being laid off coming out of the July 4 holiday. We launched a project to figure out how to grow through that and we successfully signed a company that was four times larger within about sixty days.
In a business with 70 to 80 logos and deals averaging $900,000, one renewal is a restructuring event. That is the cost of the lumpiness that also makes the ACV chart look so good.
What scale is actually for
Ackerman’s argument for consolidating is not margin. It is that a data breach at a company called Change Healthcare — an $8 billion revenue business — shut down parts of the healthcare market and turned large insurers and health systems off buying from point solutions at all.
Scale matters, particularly in vertical SaaS. Point solutions aren’t going to survive.
The internal numbers behind that push: average deal size under $200,000 in 2021 against over $800,000 now; a go-to-market team that went from two sales reps to a segmented org covering payers, providers, strategics, field and installed base; and an executive team whose average tenure, excluding Ackerman, is 1.75 years — a figure he shares knowing how it reads.
We’ve steadily upgraded the talent as we’ve summited a new mountain and we’re looking at the next. And that might sound harsh, but it’s really important and it’s critical if you want to build a large and sustainable business.
His framing for it comes from a college baseball coach, relayed to a player.
My job is to figure out every day how to replace you. Your job is to figure out how I can’t.
Sources Jay Ackerman’s interviews with Nathan Latka, recorded 7 March 2024 and at SaaSOpen on 5 September 2024, and his first Latka interview of 23 October 2019; revenue, contract-value and funding rows from the GetLatka Reveleer profile.
