CoverMe Revenue (2021)

CoverMe generated an estimated $1.6M in annual revenue in 2021.

CoverMe recorded approximately $180,000 in revenue in its founding year of 2016, its first year generating any dollar of sales. By 2020 the company had grown to $1.2 million in annual revenue. Phillips told Latka in August 2021 that CoverMe would finish 2021 at approximately $1.6 million in revenue, representing roughly 33 percent year-over-year growth from 2020.

CoverMe had 36 total customers as of August 2021, split between hospitals and nursing homes. The company added three new customers in the month immediately preceding the interview. Hospitals and nursing homes represent two distinct market segments with different pricing structures.

On the hospital side, monthly pricing ranges from $5,000 to $12,500 depending on hospital size, with one customer paying slightly above that range. Phillips stated that the average hospital contract works out to approximately $100,000 per year. On the nursing home side, a single facility typically pays roughly $25,000 per year, or a few thousand dollars per month. Because most nursing home operators run multiple facilities, Phillips said CoverMe is working to right-size its nursing home pricing and expects to bring the per-contract value up to $50,000 to $60,000 annually.

Phillips stated that CoverMe believes it is priced approximately 50 percent below market rates for both hospital and nursing home customers and plans to implement price increases as new value propositions are added to the marketplace. The average contract value across the combined customer base was cited as approximately $100,000 per year as of 2021.

CoverMe sells annual software licenses to hospitals and nursing homes, giving those institutions access to its AI-driven patient payment marketplace. Revenue is recurring and contract-based, with pricing set per facility. The company is profitable as of 2021, a status Phillips confirmed in the interview without disclosing specific margin figures.

The company's go-to-market model relies on two quota-carrying sales representatives, each earning a $100,000 base salary plus 10 percent commission on first-year revenue with residuals thereafter. Phillips stated that a single focused sales representative working either the hospital or nursing home segment should be able to sell $1 million worth of product, implying a quota target in that range. The sales team also includes a new sales director and a new marketing director as of mid-2021.

Phillips did not disclose gross margin, churn, net revenue retention, CAC, LTV, or burn rate in the interview. Profitability was confirmed but no specific profit figure or margin percentage was stated. The company's capital efficiency is notable: $1.925 million in total founder and debt capital produced $1.6 million in 2021 revenue with a profitable operating profile.

CoverMe employed 22 people in total as of August 2021. Of those, 13 are engineers. The sales organization consists of three salespeople plus half-time contributions from Phillips and one co-founder, with two of the three salespeople carrying formal quotas. The company also added a sales director and a marketing director in 2021 as it prepared to scale go-to-market efforts.

Phillips noted that the team doubled alongside revenue over each of the prior four years, suggesting headcount was in the low single digits at founding in 2016.