How Shrinking Income Led Innovaccer to Become India’s First Health Tech Unicorn

In February 2021, Innovaccer became the first Indian health tech start-up to enter the coveted unicorn club after raising $105 million in a Series D funding round led by Tiger Global Management. In December, the company raised a $150 million Series E funding round, with a valuation of $3.2 billion.

This signals a turning point for the health technology sector thanks to the strong gains made during the pandemic. The disruption caused by COVID-19 has led to the entry of new industry players into new verticals such as online consultation, online drug delivery, and software creation for large hospitals.

Innovaccer founders (from left to right): Sandeep Gupta, Abhinav Shashank and Kanav Hasija

Creation

The Innovaccer journey began in 2011 with a data analytics project at Wharton and Harvard University that aimed to gather distributed datasets and mine them using analytical technologies. Led by co-founders Abhinav Shashank (CEO) and Kanav Hasiya (Chief Customer Officer), the project investigated how Big Data can be studied, analyzed and analyzed to derive valuable insights.

The research results caught the attention of renowned universities such as Stanford and MIT, which encouraged Abhinav, Kanav and Sandeep Gupta (currently COO at Innovaccer) to found Innovaccer in Silicon Valley in 2014.

“In the first year, we worked with 80% of Ivy League colleges on various research projects and eventually transitioned to a business model focused on various industries like retail and finance” , says Sachin Saxena, founding member and head of marketing at Innovaccer.

The founders raised $3 million seed money from former Google India chief Rajan Anandan and others. Although the company is unwilling to share revenue figures, according to Sachin, the startup generated millions of dollars in revenue in the first two years.

“Initially, we worked on all kinds of Big Data and AI/ML projects and didn’t really define our niche market,” adds Sachin.

In early 2015, the team worked on a project to identify use cases for organizations working in healthcare. This led them to strike a deal with one of the largest healthcare organizations in the United States, MercyOne PHSO.

Break the market

Unlike the banking and hospitality industries, the healthcare industry is notorious for its slow pace of technology adoption, with many companies dealing with data in silos and in disparate sources, with no communication overlay. Due to the lack of interaction between the data, it becomes difficult to obtain relevant information.

Innovaccer solves this problem by integrating all disparate data sources, cleaning the data and building applications on top of it. It then uses proprietary AI/ML algorithms to generate insights for different healthcare stakeholders.

The company took on multiple projects across industries to solve various use cases, but ultimately focused on healthcare and decided to drop out. 70 to 80% of its turnover focus on industry.

In early 2016, Innovaccer pivoted and decided to focus on health.

“We identified that healthcare was an area that would require maximum data support and a need for applications for data analysis. Our vision has shifted from ‘data for everything’ to ‘data for healthcare’ to help caregivers save lives and impact large numbers of people,” says Sachin.

However, that was easier said than done. For the company, giving up the majority of its revenue streams might have been bold, but it was also scary for the founders.

“It’s been difficult to get large healthcare organizations to trust a new brand and come with their data, and we’ve moved heaven and hell for this first deal. But, it was a momentous day when we signed the contract with Mercy. They are still Innovaccer customers today and one of our most valued,” Sachin shares.

The team studied the US healthcare industry and recognized that there were two major obstacles: the lack of usable data and interoperability. “Taking into account every minute detail from the local levels, we created solutions that helped everyone and their needs were taken care of through our agile and customizable solutions,” he adds.

The majority of Innovaccer’s customers are in the United States, and the company has recently made inroads into the UK and Middle East markets. Although it is an Indian unicorn, it is not aimed at the Indian market.

Sachin adds that India offers many opportunities, but Innovaccer hasn’t ventured much into the Indian space because for its solutions to work, the requirement for a basic data framework to help deliver results must be fulfilled. Moreover, the American solution cannot simply be replicated in India because the Indian healthcare system works differently.

Although there is a lack of infrastructure, Sachin says, “we are seeing a positive change with the kind of initiatives the government has taken.”

Currently, the company’s next immediate big step is to expand its presence in the Middle East and Europe, starting with the UK.

Expanding into India, Sachin says, would take time, but “every time we move, we move with the latest standards and technologies. There is a definite positive movement.

And now

Innovaccer has 1,500 people based on seven locations spread across India, USA, UK and Middle East.

Earlier this month, the company laid off 90 employees in various departments to cut costs.

“Given the current economic conditions, we have implemented a small workforce reduction to optimize our structure and initiatives. These reductions will help us improve the efficiency of our business and take the right steps towards profitability as we continue our rapid growth. The overall percentage of this reduction was less than 8%,” said Abhinav Shashank, co-founder and CEO of Innovaccer in a statement.

The company has been part of the Indian government’s Swasth Alliance initiative, which is prone to rig building; and allows insurers and health systems to communicate more transparently.

Innovaccer claims that its solutions have been implemented in more than 1,600 healthcare establishments. It has unified patient records for over 39 million people and helped more than 96,000 caregivers work more collaboratively and save $1 billion in cumulative cost savings.

The company says it is currently experiencing 100% year-over-year growth and is confident to continue the trend in the years to come. To achieve this growth, it invests heavily in R&D and go-to-market teams globally.

“We have entered a landscape of digital transformation, and the space must now develop scalable technologies and solutions that truly meet the unique needs of all stakeholders and take a collaborative approach,” adds Sachin.

The company intends to launch a new portfolio of innovation accelerators that will help healthcare organizations tackle the most common, high-impact use cases in a fraction of the time associated with traditional methods and technologies. .

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