How MDI Health CEO Avishai Ben-Tovim grew MDI Health to $23.5M revenue and 6 customers in 2024.

hey folks my guest today is ariel efregan he's the head of growth at mdi health originally from the suburbs of chicago he now lives in tel aviv before joining the company he consulted for various healthcare startups and provider groups he also found then was ceo of pangea medical he's an active in the startup and healthcare ecosystem both in the us and abroad when he's not working on healthcare he's focused on his other passion the environment he loves to travel spend time indoors and when possible get to the beach buy his place in tel aviv ariel you ready to take us to the top yep all right so just be clear are you a founder do you own equity uh i'm part of the founding team yes okay not the founder how many of you guys are there uh and the company in total now we're about 25 founders oh founder so there's three founders um in the company yeah got it so three of you guys and and when did you really start working on this thing what year so i they started a company uh in 2019 and i joined about a year ago okay cool so 2019 you join in to call it 2020 help us understand who you're selling to it and what they're what they're paying for yeah so we've created an ai platform to optimize medication treatment so problems for medications is uh the fourth leading cause of death in the u.s and so we sell to health payers and providers such as health systems okay and and so are these long sales cycles you're talking to governments things like that or no yeah so the average sales cycle is for enterprise for what we do in health care is about 18 months so 12 to 18 months so it's really long wow and so what is the average customer paying you per month per year to use the technology so uh that is very significantly depends on the population depends on uh how the length of the contract etc but typically it will operate either on a per member per month basis or in a shared savings model so based on the gender the savings that we generate uh for the client we're able to take a bonus from that and use that as our payment essentially so really they're just paying for the value they're getting i see but if you take all your current customers today divided by your revenue i mean you can sort of back into an average contract says are we talking ten thousand dollar contracts or hundred thousand dollar contracts or million dollar contracts what's the scale here yeah no so contracts in our space are typically in the millions of dollars okay so you so if people aren't willing to spend you know a million dollars more you're you're not a fit for them uh we could be it depends on the size you know half a million dollars something like that and pilots obviously are cheaper but it just depends on the size of the client but typically large enterprise clients are going to be spending millions of dollars i see and what stage are you guys at today have you launched yeah so we're uh uh so we raised about eight million dollars or eight to ten million dollar seed round uh and we've launched we're live we've done clinical studies uh we're working with some of the largest uh health insurance companies in the world and in the us as well as some of the largest uh health systems when was the seed uh so we did that at the beginning the end of last year beginning of this year got it so eight million seed raised call it end of 2020 and where'd most that money go why did you need to raise so much capital yeah so it's uh both a function of just our needs in terms of research and developing the ai and our clinical teams and also just the growth we've had so much interest in our platform because of the impact we can have on patients and so really it allows us to essentially get to that impact and validation the level of validation you really need in healthcare but so where are you though today in terms of customers signed on and paying or is everyone still in pilot mode uh no we have customers that are uh paying and working with us uh part of the some of the commercial agreements are starting pilot mode that automatically converts the commercial contract you know there's in healthcare there's a level of kind of efficacy validation right you know if we screw up it's not like your food doesn't get to you you know someone dies right so we need to be pretty sure so there's a step of clinical validation uh which is kind of part of the pilot and then that goes into commercial terms i see i see so so how many customers i wanna go back to your first customer but how many customers are you working with today who are either on a pilot or already a full paid plan uh about six about six take me back to the first one do you remember who was it though within each one of those right there could be 10 different customers and these are 600 parent companies that we contract with but each one has you know many different for instance one is a health system that you know they have about 90 hospitals or something like that but something can we look at it's like this is these are six sort of organizations where there's contract value potential to be a million dollars plus per year so there's suspected six million in pipeline yeah more than that but yeah yeah yeah take me back to the first customer who was it and then how did you guys close them or so yeah so actually our first customer was uh academic medical center in israel called hadassah that we did a clinical study with so that was really the first and that came from one of our co-founders she is a pharmd by training and she was the head of pharmacy services for the second largest hmo in the world as well as the head and founder of the pharmacovigilance department the ministry of health and also ran her own private clinics so she's a pretty uh well-known pharmacist in the space and drug safety expert and so really because of her and her research were able to get some really early interest in in this platform so two co-founders are selling a lot early you join a little bit later really though as a third co-founder and you said that team size today total is how many folks 20 something i didn't join as a co-founder i just joined the kind of founding team so that was the sixth employee i think um yeah okay cool yeah well so how many total team members are there about 25. and and where does founding team stop is it employee 7 8 9 10 20 yeah i mean it depends how you look at it you know we give most of our employees equity and our options in their company because we want them to really be a part of our mission um but in most organizations you probably see probably the first 10 employees are part of the founding team that just depends how you define it really so got it so you join now you're leading growth what does that mean what does your day look like yeah so i essentially uh with the ceo run all the business side of their company so business development sales marketing account management launching designing pilots fundraising my day mainly consists of meetings uh either with clients potential clients uh consists of working on strategy you know where do we want to go how should we be designing our product to meet the market needs and drive the most value and then kind of business development sales marketing so what's the big revenue target i mean what do you guys think you can do next year in 2022 uh that's not something that we share publicly but things are looking very very good for us as we all know health tech is really hot space right now and there's a reason for that just because of the level of impact that we can have on clients well but there's a lot of hot spaces with companies that never you know hit meaningful scale especially after you've raised 8 million bucks so that's not hugely helpful right i mean what do you think the opportunity is for you guys based off like i mean current pipeline you know would hitting 10 million next year be exciting or is it like a stretch goal yeah i would say that that would be very exciting for us uh but again we don't publicly share what our revenue and financials are can you get to that goal with the money you've already raised or are you out fundraising another round right now so we're not actively fundraising however we're you know always open uh to it and we have lots of funds that have reached out to us and are watching us very closely and are really interested in participating in our next round we'll probably raise this series a uh sometime uh in the next 12 months and and when you think about a series a obviously there's standards and there's outliers etc but you know when you think about series a what would that mean for you guys in terms of how much you target to raise um that's really going to depend on both our revenue and just how fast we want to grow so we're one of the few startups and a fortunate position is that we really have more business than we can handle and and more kind of incoming clients than we can handle uh and so just a fact of you know what is our product roadmap where do we need to be to essentially hit our kpis with our clients and where do we really want to grow and and how fast we want to do that so what is the bottleneck right now you have customers coming in they're big acvs you raised a bunch of capital in your seed sold sold a big chunk of the company what's the bottleneck yeah partially is just hiring people so we're really trying to hire uh right...