How Zakipoint Health CEO Ramesh Kumar grew Zakipoint Health to $4.5M revenue and 110 customers in 2024.

hello everyone my guest today is ramesh kumar he's the co-founder and ceo of zaki point health the sas healthcare analytics and cost management platform for self-funded employers romesha's expertise in the field of technology data science and value-based healthcare as a successful entrepreneur with an exit to an aim listed company he also holds a ba in uh mechanical engineering from oxford uk and another one from u pen in operations research and has completed unit i have opm program at harvard business school sorry unit one there rahman are you ready to take us to the top sure absolutely looking forward to it all right well healthcare is obviously tough you're all in on it walk us through what the company does and how you make money sure so the customers we're focused on are self-insured employers what that means is these companies take employee healthcare risk so they pay for each claim and they typically tend to be 250 employees or more so they have a huge challenge around not knowing what's driving their healthcare costs you know where the risks are in the population and whether people are going to efficient places of care whether it's lower cost and high quality places or they're using er versus they're using uh telemedicine service so they have really no easy way of knowing where their costs are what actions to take and how to really engage their population to tell them hey you're better off using this versus that benefit so what we do for them is we bring all of their healthcare data into one place their medical claims pharmacy claims biometric data and using some of our proprietary predictive analytics and embedding some of the solutions solution partners we're able to show where the costs our risks are what actions they could take and also from our platform they can then run campaigns that are personalizing the messages to individual employees to help them better um utilize their healthcare benefit plan and are we talking like teams of 10 using you mostly or teams of 1000 or 100 what's kind of the average customer in terms of team size sure so the employers are typically 250 employees and above uh who tend to be self-insured our average client at the moment is about 700 employee company okay interesting and and so how do you make money are they paying you a sas fee correct so we have two tiers for a product uh the first tier is uh what we call a dollar per employee per month and with a minimum and then the second tier is three dollars per employee per month so uh on average we'll be making anywhere between 12k on the low end for a lower tier product to 36 000 uh dollars a year for our second tier for our product okay so kind of a thousand bucks a month is kind of minimum correct i'm interesting and that's typically with the team of about 700 on your lower tier dollar per user product correct interesting um what's the big difference between the dollar versus three dollars so the difference is the second t allows the employer to do the member communication member outreach and personalize that message through text email and mobile portal almost like an hr tech kind of platform they're built in yes it's a benefits communication benefits optimization for the employees yeah interesting okay put this on a timeline for us when did you launch the company uh about four years ago november 2014. and and where was your head when you came up and said you know i want to go after the hardest industry in the world healthcare i mean what were you doing at the time uh so and i loved as you mentioned in your description i love data i've been an entrepreneur in the data index side of things and i've been trained in data analytics so i was really pondering over what can i do with my skills rather than help coca-cola and heineken sell more beer and more coke using data science i rather use my skills for something more meaningful so that was really my first kind of driver and then i was actually trying to get my parents to be healthier and trying to engage them in their healthcare kind of choices and i found there's a tremendous mess and lack of transparency for individuals you and i have no idea you know where things are what things cost and how much they're at a retail outlet versus a mail order location versus a telemedicine service so that really got me going and thinking about the challenges and then you spend a lot of time in healthcare you you know bounce around and finally i got to a point where there's a business model there's a customer who has a pain point and we can do something meaningful with the uh data kind of side of things that's good now over the past four years of all this in mind how many employers have you scaled to how many are on the platform so we have about 110 right now okay 110 and then break down your current team today and how they onboard these customers is there an inside sales approach or what's it look like sure so our go-to market is worthwhile clarifying that and it's kind of evolved over the last four years and where we are locked in right now we sell through third-party administrators so these are the companies who will administer these claims for self-insured employers can you name one just put a face to it so you could see cigna as a big end cigna aetna united these are some of the much much larger third party administrators there are so many small ones out there in the country in lexington kentucky there might be somebody you know uh john smith administrator and they are our customers um our route to market so they will basically have 50 100 200 employers on their platform and so we are focused on selling to them they embed our product and they offer it as part of their administrative what's in it for them do you pay my kickback so with the two tiers the first tier is more of a differentiation they need in the market in order to win customers be able to provide better analytics reporting cost containment and so that becomes embedded into their offering uh to differentiate the second tier is what they upsell and then they'll make 30 on top i see so if they drive you one of these employees pay or employers paying you a grand a month or about a dollar per employee average teams that have called a thousand people they're getting no kickback on that correct they're only but they're embedding that one dollar into their overall administrative fees so the end the end employer is never actually seeing you know your you know zaki point health a dollar per employee not yeah so not the dollar but the second tier the three dollars that's what they are seeing sorry my point is the the end the end customer has no idea they're paying you because aetna and united roll up your fees into their price point correct i see interesting is that is that it that must be a big kind of disadvantage not to own the relationship directly to the end customer yeah i think it's been a challenge we did try to sell direct we did try to sell through benefit consultants through corporate wellness companies over the four years we've kind of tried all kinds of go to market and while we had more access to the end customer but the employer of this size does not have the bandwidth to kind of deal with somebody like us and selling one at a time was just not scalable so uh finding tpas as a way to sell to a lot more employers but also to ingest the data in one one go makes it a lot easier for us to scale sure are you bootstrapped or have you raised capital we've raised about just short of a million dollars from angel investors okay uh a million bucks and how many people on the team today so we are 17 people uh split between nepal kathmandu nepal and uh boston nepal and boston why nepal actually my co-founder is from kathmandu nepal and uh he built a company in healthcare analytics uh built a team of about 300 people in nepal uh prior to this so we thought this is going to be you know take two for him uh and for me um i've always been uh fascinated by how you can leverage the skills in offshore kind of setting as well very interesting okay so 17 people boston nepal and are you guys at break even yet are you still burning cash no so we are break even that's great when did you hit that milestone that's a big one yeah so we hit probably like uh late last year okay so like call it november 2018. yeah that's great so any plans to raise additional capital to fuel growth or you're happy where you are no so this is a really exciting time we have kind of figured out the model we figured out the you know revenues growing we're getting customers so now we are looking to bring on board some serious kind of talent on the team and uh you know increase our burn through that and do a 3x in terms of revenue growth over the next 12 months so we are right now just starting to uh work on raising three million dollars from venture capitalists or strategic investors okay would you ever consider venture debt or you definitely want to do diluted vc i actually have looked at the revenue-based debt uh and i'm just not quite sure 100 whether we can get enough capital through that that was the main kind of yeah yeah typically those folks will only give you up to like four or five six sex your mrr which obviously doesn't get you to the three million but um it's obviously non-dilutive though which is nice yeah so i might actually do just do like if i'm if i'm able to get a little bit through that and then the remainder could be equity-based yeah yeah yeah i'm seeing a lot of entrepreneurs do that that's interesting you'll have to come up come back on in a year and let us know how that goes sure um tell...