How Reveleer Got On Track for $100M Revenue with 70 Customers in 2024 (Interview with CEO Jay Ackerman)

Introduction and Welcome

Nathan Latka

00:00Who you're gonna learn from now is someone that understands data, understands growth, understands how to do it in a full control kind of way. Please help me give it up for Jay at Revealer. Jay, come on up.

00:13Thanks for being here, man. It's been great. It's super it's super good to see you. I remember we caught up recently because they had you back on the podcast, and I I never know how people have grown in terms of revenue. When you said the number, I said, what? Yeah. What's going? This is incredible.

Revenue Milestone: $100M in 2024

Jay Ackerman

00:27>> Yeah. Well, we're going we're gonna make a 100 this Well,

Nathan Latka

00:29here you go. Stage is yours. Have a lot of fun.

Jay Ackerman

00:31>> Coach us up. Alright. Well, I'm I'm feeling a little out of place. I definitely don't have the cool pants going.

Reveleer's Story and Capital Stewardship

Jay Ackerman

00:39>> And hard to hard to beat the this the two sessions before. But I'm I'm excited to be here. I guess I have the socks, so maybe not the pants, but I got socks to be my thing. I'm excited to tell you the story of Revolier. We're we're in an interesting space. Our story is not one that was birthed overnight. We've gone through our challenging times, but now we're in a great place. And and I'm proud of

01:05>> because we've been really great stewards of capital. We've raised capital from institutional investors. We've never raised a crazy round at some valuation that we couldn't live up to, and it's allowed us to build a phenomenal business. So as as I spend twenty minutes with you today, we're gonna cover three things. A little bit about Revolier. We're in the health care space. It's complicated. It's a bit technical. Give you a little bit of kind of understanding of

01:32>> what we do and how we're on a path to build a billion dollar company. I'll talk about our superpower. I think everybody has a superpower. When I interview executives, I'm trying to understand what their superpower is and how do they bring that to our company. And I'll share what our company's superpower is and how it's allowing us to succeed in a in a big space and one that many might consider crowded. And I'll share some learnings.

01:59>> The words here might look like they're simplistic and trite, but I'll hopefully share some learnings that that we've gone through where we've skinned our knee, where we've fallen, and hopefully, you won't do the same.

Revenue Growth Timeline: $1M to $100M

Jay Ackerman

02:14>> Yeah. We've had a pretty interesting ride over the last few years. What's important here is over the first six years that I've been running this company, it took us six years to go from 1,000,000 to 25. And we had many moments where we thought we were on that hockey stick and it was all going to be great from there on in. We were feeling that way and coming out of 2019 and all of a sudden COVID

02:40>> hit. Our first reaction was we're in healthcare. We're in a government sponsored part of healthcare, it's not going to impact us. And next thing, the government shut down a lot of the markets that we were in. So we took a pause, but coming out of '21, things really took off. And so six years from one to 25, one year from 25 to 50 and this year we'll go from 50 to 100. And we're really excited about

03:09>> that. And we're generating cash and we're generating really strong EBITDA, which is giving us an opportunity to drive this business with some smart and strategic M and A, which I'll talk about. And I think there was we have some things in common with the earlier speaker. So Revolier at glance, we're a health care company. I'm passionate about making healthcare better. And we're in the corner of value based care. And for the audience here, value based care,

03:40>> simply put, is about getting payers, the insurance companies and providers, health systems, doctors to work together to ensure that a patient, their member gets better. The typical healthcare model is a fee for service model. You go in, you're treated, you leave, and that doctor, that healthcare professional does not really have an incentive to make sure that you stick to a care plan and you get better. So we're in the value based care world. We're using AI

04:07>> and workflow automation to bring those payers and providers together to better understand what's happening with the patient. And we're taking off. Like I said, we'll do about $100,000,000 this year. We'll probably have an end of year ARR of 105,000,000 to 110 And I think that puts us in a position to do 200,000,000 next year. But what's really important, we had strong gross margin now generating EBITDA and it allowed us to do a debt raise that Nathan

04:38>> referenced earlier. So we did a $65,000,000 debt raise with a company on the bottom, Hercules Capital. And we're excited to welcome Hercules as a capital partner along with two institutional equity partners, Oak HCFT, which is well known for their work in health care and upfront ventures located in Los Angeles, your typical broad based long term venture investor.

What Reveleer Does: Value-Based Care and AI

Jay Ackerman

05:04>> So how do we build a company now approaching a billion dollars of value? One, we had the vision early on. We had a vision to take a tech enabled services market and transform it to software, the typical Marc Andreessen software eating the world. Our marketplace that we're selling into has been served by tech enabled services, armies of people working offshore to digest clinical data, and we're doing it through automation. So we started there, and then we

05:36>> saw a bigger opportunity to be the platform for value based care. And that's where our M and A strategy aligned with strong product innovation is really driving transformative outcomes. We brought on a transformational capital partner in 2021 and people talk about when you go out and look for an institutional investor, it's more than the money. That's true. When you really need the money, maybe you're not always thinking about what else they bring, but we brought on

06:05>> OakHCFT. They had a shared vision with me on how we could build this value based care platform and we immediately aligned on what we could do together. And they had been nothing short of amazing. We went from closing our round with them in November '21 to closing our first acquisition in March '22, a company that I built a relationship with over a number of years. And so one thing you'll hear from me on our M and

06:34>> A, and I have a slide in a few minutes to just talk about how we've done that. Every company that's in our pipeline, we've built relationships with over a long period of time. My head of corporate developments in the back, I think this year alone up until September 1, we've talked to 60 unique companies. We're working on a transaction now with a company that we first brokered a relationship with in early twenty, late twenty one. So

07:02>> we try to start with a partnership, make sure there's product market fit and if our values and our culture align, we try to make something else happen. But Oak has been a transformational capital partner. Product driven M and A, I think Chili Piper was talking about there's consolidation in healthcare. Why is there consolidation? Because there's concern about PHI risk. All the data that we all sit on and what would happen if a company is breached. There

07:29>> is a well known breach that took place earlier this year with a company called Change Healthcare, massive $8,000,000,000 revenue company that shut down the healthcare market. And it's really turned off big insurance companies and health systems on dealing with point solutions. They're concerned about the risk. So scale matters. We have a great product team, but we are rounding it out with thoughtful strategic M and A. And with every good story, there's grit. We've had those moments

07:57>> where we weren't sure we were going to make payroll. We were stuffing some invoices in drawers and we were paying the loudest person that was calling. There was a moment in 2018

08:09>> after a successful run at a prior company, I bought kind of the last house I thought I would ever own. 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. You believe in an opportunity and you have confidence in your team.

Superpower: Clinical Data Ingestion at Scale

Jay Ackerman

08:34>> So how have we been able to scale this company? So 2019 was our first time that we introduced machine learning into our product. Now everybody's calling it AI. I mean, is machine learning, its rules. We introduced it in 2019 in a way to read a medical record. We now ingest almost a billion pages of medical records annually. Think about that. It's like 3,000 pages a minute. So we introduced that which drove a lot of automation in

09:06>> our platform, which led to us signing our first national health plan. '21, Oak comes in. First time we have capital on our balance sheet to shift from playing defense to offense, Allowed me to go out in the market, make some new executive hires, upgrade talent. It's interesting to think about the talent that you can attract when you're sub 5,000,000 from five to 10, above 10. And now we just brought on a new Chief Product Officer who

09:31>> joined our company a week ago and what we can get with a company that's $100,000,000 going to $200,000,000 And then we did the two acquisitions. We did an acquisition beginning in 2022, a company that rounded out a solution set for us and a company in '23 that moved us from payer into the provider space. And we'll talk about how that's expanded our TAM. And so as we've been thinking about this business and as I think about

09:57>> where we're going, I am always focused on the total addressable market. I do think it gets overinflated. I think that was a comment made earlier. And so we work hard to say in that market, how much can we really sell into? Are there players who will never buy what we have to offer? And we keep thinking about how can we broaden it with new solution offerings that make sense, that are largely the same buyer inside of

10:24>> the logos that we're selling to. So we started with a $2,000,000,000 market, which seems pretty big. Hard to build a really scaled business on a $2,000,000,000 TAM. 2020, we introduced our second product suite through our product team, and it widened our TAM immensely. And then in 2022, with our first acquisition, it moved us into another product suite, adds another couple billion dollars to our TAM. And then most recently in '23, with our second acquisition, add about

10:54>> $4,500,000,000 to our TAM. And now we sit with a company that's $100,000,000 and a $20,000,000,000 market with clear line of sight to build a zero five billion dollars business. Our superpower is around how we ingest data. And so at the heart of healthcare, you have massive amounts of clinical data being generated daily. Estimate right now is 1,200,000,000 clinical records being created annually. The problem with that is it's a massive amount of data that your doctor can't

11:27>> digest. It's hard for them to get ahold of it. It's harder for them to understand that and to be able to use that to their advantage in a twelve to twenty minute visit. And that's what we do. We gather that, we distill it and give them three to five recommendations when a patient comes into their office. And that's our superpower.

Strategic M and A: Two Acquisitions and What They Delivered

Jay Ackerman

11:48>> All right. So let's talk about strategic M and A.

11:52>> So as I said, we've been able to grow our company through it. And if you look at our 100,000,000 in revenue for this year, roughly 10% of that is acquired revenue. So we didn't hit, we didn't go from 50 to 100 by making this massive transformational acquisition. We saw our product gap. We knew if we filled it, we could sell a larger solution, solve a bigger problem and get ourselves in opportunities where that door was being

12:18>> shut on us in the past. I'll And show how that's played out at the end with a couple of metrics. So we've done two. Those two, like I said, had about $10,000,000 in ARR at close. And in twelve months across the two of them, we've been able to double the business, but also fueling our other solutions. And interestingly, on the first one, we were

12:40>> 5% equity, 75% cash to pay for that, 25% giving them equity. Our second deal,

12:51>> the equity shifted to being fiftyfifty equity in debt. So we had our debt partner. And now we're working on our third where we'll be 100% funded by debt. And we can do that because we're generating strong cash in our business. And it's given us the ability to control that, manage our cap table, ensure that we're taking care of our investors.

13:16>> Yes. So, you know, here we are with a couple acquisitions under our belt, company scaling, really leading to some pretty fantastic metrics for the business. Top, I thought I'd just show kind of go to market coverage. Actually, I think for 2025, our go to market coverage will be 65,000,000. So I talk about superpowers. I think one of my superpowers is go to market. How do you scale a business in the marketplace? So I think all the

Go-to-Market Coverage and Deal Size Growth

Jay Ackerman

13:42>> time about how much quota we have on the street. I'm at an industry conference, I'm always trying to talk to sales reps of competing companies to understand what they're doing, how they're incentivizing their people, do they actually have proper compensation plans? And I'm shocked at how often they don't when someone says, I don't have a commission plan, I'm bonus. I'm like, well, you have a bonus, you're not a sales rep. So we're thoughtful about how we

14:04>> go to market. It's leading to larger deal sizes. It's amazing that we were doing average deals of under 200 ks in '21, and our average deal today is over 800 ks. Like, we're in a lumpy business. It's b to b enterprise. So we have 70 unique logos, maybe approaching 80 at this point. We're not selling to tens of thousands of endpoints. So when you get one of those, you try to have a big impact and you've

14:31>> got to make sure you focus on retention. And you can see net retention in lower left. And I'll talk about some of our learnings on that front. And on historical headcount, I just want to show we're a growth company driven by product innovation. And you can see how the headcount is jumping. Our R and D team product, AI engineering jumping significantly from '21 to '24, and our go to market team making big strides. In 2122, we

Talent: Upgrading Executives as the Company Scales

Jay Ackerman

15:00>> had two reps. The problem with two reps is you never want to let go one who's underperforming because then you're down to one and you're kind of held hostage. And now we have a large sales team broken out by payer providers, strategic reps, field reps, folks focusing on our installed base. And it gives us an opportunity to continue to upgrade and strengthen the team.

15:25>> All right. So what are some of my critical learnings over the last eight years? And talent. Everybody talks about talent. Talent's important. I used to interview every single person we hired. Can't do that any longer. I'm fascinated by those leaders who say they do it at sizes companies much bigger than ours. I don't know how they do that. I'm impressed by it. I do interview every VP. From our executive team, here's an interesting metric. I'm proud

15:52>> of it at times, but I also question my own skill. The average tenure of an executive on my team right now is one point seven five years if you take me out. You put me in there, you know, being here eight years, it kind of blows the number, but 1.75. And the point of sharing that is we've steadily upgraded the talent as we've summited a new mountain and we're looking at the next. And that might sound

16:17>> harsh, but it's really important and it's critical if you want to build a large and sustainable business. You know, I heard an interesting quote. I'm I'm a sports guy. I played hockey. I have two boys who play baseball. And so now I'm like in the baseball world, and I heard a baseball coach recently say to a player, this is a college coach, my job is to figure out every day how to replace you. Your job is

16:41>> to figure out how I can't. And I think you have to think that way with talent. Scale. Scale matters, particularly in vertical SaaS. That's the world we're in. Scale matters. Point solutions aren't going to survive. And so we are moving aggressively down this inorganic, inorganic path. And so if you're in vertical SaaS, I would think hard about how you scale. We've done a lot on the innovation front and we did it when we didn't have capital

17:08>> because we found partners who believed in us and we innovated with them. We had one partner very early on that leaned into us when we were talking to big companies that we just didn't think they would pay attention and help us at time of need. Then we ultimately bought the IP back from them as we got more scaled. So I believe in partners. I believe in partners, but I believe you also need to know what is

17:29>> critical IP for you and to make sure that you get that back if it's not in your house today. Lastly, on customer retention, and it's a humbling one for me to share because, I was one of the preeminent, folks around customer success before it was its own function. And as I look back on my time leading this company, we have had a couple of moments where we've stumbled on the customer success side. And when you do

Scale Matters in Vertical SaaS

Jay Ackerman

17:56>> that in vertical SaaS and B2B with large deals, can be hugely disruptive. We had a lighthouse customer that got noisy. We thought they were being overly demanding. We started to push price higher. And then on July 3, right before July 4, they sent a notice of nonrenewal, and 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

Customer Retention: A Hard Lesson Learned

Jay Ackerman

18:22>> and we successfully signed a company that was four times larger within about sixty days, But it was a great lesson to not get, if you have that kind of lumpiness in your company, you need to be really smart about how you deal with those enterprise customers. And so we're leaning in really hard on our customer success team now to ensure that that doesn't happen again.

Losing a Lighthouse Customer and Recovering

Jay Ackerman

18:45>> Alright. So I think I'm at the end of our time. Hopefully, I've done a good job of giving you, insight into how we're building a billion dollar business. I think we're really on the cusp of achieving that for our investors. It hasn't been easy. It comes through a couple of superpowers, how we deal with product innovation with our AI and machine learning, how we're using thoughtful M and A and how our capital and equity and debt

19:11>> partners are fueling our growth. And hopefully you won't go through some of the you won't skin your knee the way I have over the last eight years. Thanks for listening. Enjoy the rest of the day.