How Jiva.ai Raised a £1.3M Seed at a £4M Valuation With Zero Paying Customers and 12 Pilots in Progress (Interview with CEO Manish Patel)

Introduction and Background

Nathan Latka

00:00Hey, folks. My guest today is Manish Patel. He's trained in the biological dark arts of genetics, bioinformatics, and systems biology before spending some dark years in algorithmic trading teams and investment banks and hedge funds. Now he saw the light. He's co founded a hospitality software business, a serial CTO, and then took the dive recently into jiva.ai, where he's creating multimodal AI systems. Manish, are you ready to take us to the top?

Manish Patel

00:22>> Absolutely.

What Multimodal AI Means and Why Healthcare

Nathan Latka

00:23All right. Multimodal AI systems for what niche?

Manish Patel

00:29>> Basically, wanna target healthcare first, right? So the problem with multimodal AI is that actually its application is everywhere. Wherever you look, wherever you're applying deep learning technologies to learn about complex things, complex things inherently are difficult to understand, difficult to get patterns recognized. And so we built this company in recognition of the fact that when you want to do some machine learning, you don't have to have over application of Occam's razor and, you know, down to

01:04>> every sort of little vertical and learn about each little vertical. You can learn about all of them and put them all together and that is what we call multimodal AI.

How Clinicians Use the Jiva Platform

Nathan Latka

01:14So explain to me how a healthcare provider may pay you to use your tool to do things like, you know, live monitoring, real speed of execution, you know, alerts for medical staff, things like that.

Manish Patel

01:23>> Sure. So there are a couple of ways we provide this service. So first of all, our platform is a general purpose machine learning platform. So in the same way that you pick up Microsoft Word to write a document, My vision is that clinicians will pick up jiva to create an AI technology, an AI solution for whatever they want to do. So whether you're a respiratory

01:47>> clinician who wants to learn about COPD or COVID from CT scans or you are a urologist who wants to learn about prostate cancer from MRI scans, you pick up jiva, you plunk your data in, it tries to figure out the best model for you and you can then use that and commercialize that, get it all clinically validated and all that jazz.

Proprietary Diagnostic Products as Proof Points

Manish Patel

02:08>> When I first presented this idea, this was a really difficult thing for clinicians and investors to get their head around, and so we had to kind of be our own customers. We created our own diagnostics products. We've got a prostate cancer diagnostic, we've got a liver disease diagnostic, we've previously created bone fracture diagnostics as well. That is just in the diagnostic fields, but you know, concentrate on that because that was the hot hairies at the time.

02:34>> But you know, the two things that we're doing there obviously then are subscription for the platform and then subscription for

Platform Pricing and Target Customers

Nathan Latka

02:42What full type of paying are on average for subscription to the platform?

Manish Patel

02:47>> So platform can be highly variable. If you're talking to academics R and D, that's hundreds of pounds a month. If you're talking to corporates, that's thousands of pounds a month because their requirements are just just so vast. What's your

Nathan Latka

03:01sweet spot though right now? If I forced you into an average, would you say $2,000 a month isn't a good average?

Manish Patel

03:06>> More. 3 to 4,000 would be a Three good to four.

Founding Story and Going Full Time in 2019

Nathan Latka

03:09Okay. Interesting. And and now tell me give me the backstory here. When did you write the first line of code for the platform? What year? 2001. Oh, wow. You've at this for a while. Okay. Have you been full time since 2001?

Manish Patel

03:22>> No, no, no, no. So the seed of the idea of jiva was actually when I did my PhD. That's when I first wrote my first line of code. And actually, wasn't even a coder. I was learning on the fly. And we recognized that we had to get better ways to simulate complex systems, simulate tumors. And that's when we started. And the ideas that we built from that project, the idea that you can merge different models together

03:46>> to create more representative predictors, came from there. And that's what was been rewritten and rehashed in When did go all in?

Nathan Latka

03:54What's the all in day?

Manish Patel

03:55>> '19 so, okay, 2019, technically, but we were thinking about it from 2014 onwards. I actually went part time in my roles at banks and hedge funds in around 2014, 2015. And so that was when I was like, no, I need to go and do something more creative. And then I went head first into it in 2019, much to my wife's consternation because I didn't have any salary for a while.

Nathan Latka

04:24Did you have any savings?

Manish Patel

04:26>> Yeah. Yeah. I mean, we had we had some savings and and luckily luckily I was lucky enough to work in two major banks, although one of them was Lehman Brothers.

Nathan Latka

04:36Yeah. Hear they pay big bonuses. So if you're operating in dark pools and hedge funds, shaving milliseconds off a trade and doing some arbitrage, I bet you had some savings.

Manish Patel

04:44>> There was yeah. There a significant upside to those jobs to that job in in that respect for sure.

Three Co-Founders and the Equity Split

Nathan Latka

04:48Alright. So 2019 you get going and are you the sole founder? You own a 100?

Manish Patel

04:52>> Nope. We're three founders, a friend of mine of twenty five years, actually a friend from university and another friend who is our COO. All three of us are three home owners.

Nathan Latka

05:03Did you guys just be nice and split 33, 33, 33 at the beginning or no?

Manish Patel

05:08>> No. So technically me and Chet, so we were fifty fifty to begin with. And Sarah, we bought in because we realized we're just administratively really rubbish. And then she stole a nice chunk.

Nathan Latka

05:19What's a nice chunk? Like 10 to 20%?

Manish Patel

05:22>> Yeah. Yes. Okay.

Bootstrapping, the UK Grant and the £1.3M Seed

Nathan Latka

05:24Now what about investors? Have you guys bootstrapped or did you raise?

Manish Patel

05:26>> We bootstrapped to begin with. We we went to friends and fools and family to to get our first 250 ish thousand pounds. That was 2019. Okay. And, or shortly after we incorporated, we incorporated February 2019, six months later for our funding, won around £400,000 in grant funding, so as you know, The UK has a really great funding program from the government, which is non equity raising, and then just recently closed a 1,300,000 round with institutional investors.

Nathan Latka

05:57This year?

Manish Patel

05:58>> This year in May.

Nathan Latka

05:59Oh, very cool. What valuation did you raise at?

Manish Patel

06:02>> So that was around a £4,000,000 valuation.

Nathan Latka

06:05Pre money or post?

Manish Patel

06:07>> Post. Post. I think a

Nathan Latka

06:093.2 pre something like that.

Manish Patel

06:11>> We had to, yeah. We had to, yeah. We to skin it a little because it was, yeah. I mean, it was the time during COVID times kind of the situation we found ourselves in. But we have, I think unpleasantly, I'm pretty confident that next year is gonna be, much better.

Nathan Latka

06:31So you guys sold about 20% of the business in that round, 25%, something like exactly. What cap was the pre seed at, 250 k?

Manish Patel

06:39>> So yeah, it was 250 k, yeah, pre seed, and we didn't wanna go any more than that because there were certain tax rules around EIS and SEIS funding, we kept our 250 k, and that is gonna be your most expensive round, right? Your pre seed and seed are gonna be your most expensive round. So we didn't wanna go crazy on a lower valuation. And so we did just enough then, enough to get to where we want to

Nathan Latka

07:00>> go in this year.

07:00What valuation was that? A million valuation? Something like that?

Manish Patel

07:03>> That was a million. Yeah. Pre money. Yeah.

Nathan Latka

07:05Okay. So you've sold twenty five percent two to or twenty percent two times basically is the way to look at that.

Manish Patel

07:09>> Yeah. Yeah.

Pilot Customers and the Path to First Revenue

Nathan Latka

07:10Exactly. Fair enough. But you're off the races now. How many customers are you working with?

Manish Patel

07:14>> So oh, god. I I don't I don't have the number, but at least a dozen that are that are or will be paying soon in our pipeline.

Nathan Latka

07:23How many are actually paying, Manish? Come on. You must know this number. This is like the lifeblood of the business. How many paying customers?

Manish Patel

07:28>> So zero right now.

Nathan Latka

07:30Okay.

Manish Patel

07:30>> Next month, three.

Nathan Latka

07:32Okay. Got it. So you have you have 12 that are basically in pilot phase. Right? What what do you know that they need to do in pilot to convert to paid?

Manish Patel

07:39>> You gotta show that you got value. Right? The number one thing is you gotta show these guys that whatever you're introducing is actually having some value being driven out from the introduction of this new technology. So it's a slow burn in healthcare as it is, so it's a little bit of a hard sell, but when you get there and you show them what you can do and you can say, well actually look, you'll save a whole

08:02>> heap of cash over here and you'll make a whole heap of efficiencies over here, Why don't you do that? And so we show them, they pilot it and then they'll say, yeah, okay, we'll buy. And that's we're at that stage where we've got a number of customers saying, we'll buy. But then we're just going through the cycles.

Nathan Latka

08:18So you gave me those average contract values earlier. What were you basing those off of if you're pre revenue today?

Manish Patel

08:23>> Think in the year.

Nathan Latka

08:24Okay. You're just that's sort of what you think you're gonna charge once they convert. Okay. So you must be very powerful at convincing investors because you raised 1,300,000 at a 4.5 valuation pre revenue. Right? So what did your slides look like? Did you just use the pilots to show traction?

Raising Pre-Revenue and Pitch Preparation

Manish Patel

08:37>> So first of all, I'm a crappy salesperson. I really am. I'm a reluctant CEO. I didn't want to be CEO actually. Was kind of my chairman and the other founders kind of forced me into it.

08:52>> But no, I had to learn on the job and I have great people around me. And one those people, or actually more than one of them, is very, very good at being critical about what I do in terms of the deck, in terms of the way it looks, in terms of the story that I tell. And so having those people around me to tell me how I should hone it was actually what sold it. And I

09:14>> honed that, practiced it, I've recorded myself doing a pitch a number of times, watched it over. It kind of helped that we were in COVID times because doing it in person is slightly different from doing it online. But yeah, no, there was a lot of practice involved.

Nathan Latka

09:32Fair enough. So you spent your COVID watching yourself give yourself funding presentations basically.

Manish Patel

09:37>> That's not a bad a whole Can I convince myself? Can I convince myself to give me £1,000,000?

Burn Rate and Runway

Nathan Latka

09:41Yeah. That was just So how much, how how many months of runway does 1,300,000 get you guys? What's your total burn today monthly?

Manish Patel

09:48>> Our monthly burn is really low. So look, we're 50 ks monthly burn at the moment.

Nathan Latka

09:52That's total expenses or net burn?

Manish Patel

09:55>> Net.

Nathan Latka

09:56What are total expenses So all

Manish Patel

09:59>> it varies because we have some regulatory work that we're doing and that's quite sporadic, but it won't go over a 100 k, put it that way.

Nathan Latka

10:07Okay. So between 50 and a 100 you're burning, your bank's going down per month. You've got at least thirteen months of runway in the bank.

Manish Patel

10:12>> Exactly. And we have, you know, we've got, again, confident that we can get more cash next year.

Team Structure and Early Hiring Philosophy

Nathan Latka

10:19What's the team look like today? How many folks?

Manish Patel

10:22>> So there are six people full time, six more that are part time. Some of those are actually consultants and or who actually sit on our board. And as an early stage business, think that was a really important decision to get experience rather than junior people at the beginning. And I think that's what's actually turned the company's fortunes over the last eighteen months over COVID because COVID is one of these times, think I think somehow I remember

10:48>> someone saying that if if your startup survives COVID and gets funding, then you've gone through an evolutionary selection process that that that shows that you've got some resilience.

Nathan Latka

10:56Modern day Silicon Valley Darwinism is what we'll call it.

Manish Patel

10:59>> Yeah, absolutely. I say that's exactly it. That's exactly it. So many companies fail too much.

Famous Five and Closing Advice

Nathan Latka

11:04Yep. Manny, well, is good stuff. Thanks for coming on and sharing your story. Let's wrap up here with the famous five. Number one, what's your favorite business book?

Manish Patel

11:11>> Oh, God.

11:15>> I can't remember the name of the book, but the one that had the nice little graph with the gap that's had

Nathan Latka

11:21Crossing the chasm.

Manish Patel

11:23>> Crossing the chasm, that's it. Yep. Yep. Yep.

Nathan Latka

11:26Something the fact that I know that based off you just saying the graph Yeah.

Manish Patel

11:29>> Yeah. Drawing the graph on my finger.

11:31>> Yeah. Yeah. Yeah.

Nathan Latka

11:32I love that. No.

Manish Patel

11:33>> Geoffrey Moore, that's a great book.

Nathan Latka

11:34And number two, is there a CEO you're following or studying?

Manish Patel

11:38>> I I so I was just gonna sound really corny, but I am following Elon Musk at the Not for reasons that other people might, but I I think he's a I think he's a quite smart guy.

Nathan Latka

11:48Number three, what's your favorite online tool for building the business?

Manish Patel

11:51>> On sorry. Online tool, did you say?

Nathan Latka

11:53Yeah. The one that you use the most.

Manish Patel

11:55>> Oh, Google Google Google Suite.

11:57>> Google Suite.

Nathan Latka

11:58Number four, how many hours of sleep do get every night?

Manish Patel

12:02>> Four to five.

Nathan Latka

12:03Okay. Not horrible. What's your situation? Married, single, kids?

Manish Patel

12:06>> Married with two kids.

Nathan Latka

12:07Two kid wow. You're a busy guy. Alright. How old are you?

Manish Patel

12:11>> How old am I? 42.

Nathan Latka

12:1442. Last last question. What's something you wish you knew when you were 20?

Manish Patel

12:18>> Say say again. Sorry.

Nathan Latka

12:19Something you wish you knew when you were 20.

Manish Patel

12:22>> Oh, how hard startups are.

Nathan Latka

12:25Guys, startups are hard. He's been thinking about this idea since 2001 when he when he came out college. Wrote the first line of code back then, went full time 2019. Did a $250,000 pre seed round at a million dollar valuation, did another $1,300,000 round seed, 4,500,000 post money valuation just this year. Sold 20% of the company two times, but has a great team, 12 customers and pilots right now, hoping to move those folks into paid accounts

12:47here in the next two to three months. They're only burning, call it, 50 to $100,000 per month right now. So thirteen months of runway in the bank. Team of six as they look to scale. Again, building jiva.ai, helping healthcare providers get into their data, pull signal from noise faster. Manny, thanks for taking us to the top.

Manish Patel

13:02>> Thanks so much for the time.

Nathan Latka

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