When, why and how did Novu start?
I founded the business from scratch in 2011 with my two brothers, Jim and John Wicka. We came out of the consumer direct marketing space, so think loyalty and engagement programs like SkyMiles for Delta, Best Buy Reward Zone and other such strategies to influence consumers share of wallet that for 30+ years has proven to work.
As we were looking at the healthcare industry and the ACA changes, seeing the way in which individuals would be more independent in their decision making and also the way in which payers and providers were going to be compensated pay for performance.
Between those two major influences, we really felt that our background was important. Important because we have a lot of experience with engagement and saw that as a way to improve the healthcare equasion in this country as we are now with Novu.
How did that manifest through a technology product?
Novu Prime is the cross device SaaS platform we architected, which acts as a membrance between you, as a consumer, and the healthcare ecosystem — doctor, insurer, pharmacy, etc.
Through various techniques, we make that custom experience more interesting and rewarding. This increase in uptake results in behavior changes that positively impact the person and the healthcare system because engagement leads to adherance leads to outcomes.
Moving forward, we’re expanding our product set that sits on top of Novu Prime with more specific protocols and outcome objectives.
Is the distribution and market for Novu all B2B?
Correct, we built it to be white-labeled. Loyalty and affinity shouldn’t be about Novu, rather we’re the agent for our customers between them and their members.
How many customers do you have and what’s the market share?
30-35 customers. Our addressable market is every American, and there’s overlap. We have a low share of that…no one has a large market share. I consider us to be a market leader and in the next 3-5 there will be clear standouts.
What is the competion like?
We see three segments:
1) Traditional wellness companies like Stayhealthy & Redbrick Health. They have typically delivered wellness programming through employers and now they’re pivoting to more SaaS based solutions and targeting payers & providers that we are.
2) Those like us, say Limeade or Welltok, each with their different twists.
3) Those who have created their own solutions internally
How do you charge for the service and what are your revenue streams?
Novu Prime is per member per month, per member per year fee based on exposed target population. There are additional products that also add on to that.
Did you raise money earlier in the business?
We self funded it to this point and reached cash-flow positive level before raising outside capital.
Why did you take $20m and why the partners you picked?
Because we’re ready to scale! We hired Greene Holcomb Fisher who helped us identify SSM Partners and Noro-Mosely. They have a proven track record and we felt they distinguished themselves all around.
What’s the application of your $20m capital infusion?
70% into headcount, remainder into services.
How many employees do you currently have and where?
We have about 80, mostly here in Minneapolis with a few remote salespeople in certain areas. I think we’ll double sometime in the next 12 months in terms of headcount and the majority of that will of course be here in Minnesota. About 40% engineering, 25% in marketing, 20% in operations/clinical, the remainder in sales and leadership.
Any interest in acquisitions?
If so, we’d look at operations and revenue. Can we build it ourselves or look outside? That profile would be someone with more of a point solution. We’ve got the engagement platform, but as I mentioned, are now getting into add-on products, or point solutions as I term them. I don’t see us buying another platform, rather someone who is stuck in the rut with a more niche product.
Is this the beginning of successive rounds?
This may be the only round or there may be more to come, although its not contingent to our master plan.
What do you think about liquidity?
I don’t think about it.
What do you attribute your success thus far to?
Because we didn’t have healthcare in our background we brought a fresh perpspective without attachments to old and failed systems. Secondly, our employees and leadership team – we fundamentally make good gestalt decisions. There are 1,000 ways to die and few to succeed.
How do you measure success in terms of increasing the health of people’s lives?
Engagement level in aspects like frequency and intensity. Below that would be utilization metrics and then tangible outcomes per person. Our customers may have their own more direct to consumer goals.
If I can show strong results in our areas, I’m highly confident the outcomes will follow.
How many end users are you currently reaching and whats the addressable market?
We’re exposed to about 10 million people out of the entire US market, with some overlap.
Lookin ahead, what are your big question marks?
Are we continuing to make thoughtful well measured decisions? Are we moving fast enough?
Is there anything else you’d like to add?
No. Good questions, thank you!