HealthEngine raises $26.7 million from Sequoia and Alium
Medical appointment booking business HealthEngine has raised $26.7 million in what is likely to be one of the largest rounds of 2017 for an Australian start-up.
The Series C raising was led by Sequoia India, with participation from local institutional investor Alium Capital (which also backed Nitro this week) and some high net worth family offices, as well as existing investors such as Go Capital, Carsales founder Greg Roebuck and LUX Group’s Adam Schwab.
In March Street Talk reported that HealthEngine was approaching investors, trying to raise up to $20 million. HealthEngine chief executive Marcus Tan told The Australian Financial Review the company had decided to extend the size of the round after Sequoia came on board late in the negotiations and was keen to participate.
“We already have groups such as Seven West Media and Telstra Ventures as cornerstone investors, and it’s good to have Australian companies supporting other local businesses, but we have grand aspirations and we want to improve healthcare globally,” he said.
“Sequoia also has a strong pedigree when it comes to investing in health and tech… and we need people on board who have a global perspective.”
HealthEngine has now raised close to $50 million to date. The company would not reveal its valuation, but it is likely to be well north of $100 million.
Sequoia has backed companies such as Apple, Google and LinkedIn and more recently Stripe, Airbnb and Whatsapp.
Sequoia India principal Pieter Kemps said he was impressed with the development of the business in Australia.
“They have built the foundation of a powerful Health Experience Platform that improves the lives of patients as well as healthcare practitioners,” he said.
“We have been impressed by the HealthEngine team as they are credible domain experts with the technical and commercial smarts to build a world-class business.”
The business was founded in 2006 by Dr Tan and Adam Yap and has shifted from being a digital healthcare directory to a booking service and eventually a marketplace.
HealthEngine has 1 million Australians using the website or app every month and about a third of all GP practices in the country signed up, as well as dentists and physiotherapists.
Since changing from a directory to a booking service, the company has focused on building up the number of healthcare practices on the platform, but with the latest capital injection it will increase advertising and marketing, rather than having users discover the platform “serendipitously”.
Dr Tan said he was also looking to expand HealthEngine overseas, with this likely to be done through acquisitions.
“The market size in australia is around $160 billion in healthcare per annum alone and globally expenditure is going up because of an ageing population, so it’s still an exciting local opportunity,” he said.
“But companies like Carsales have gone global after building a strong local business and acquiring companies overseas, and those options are available to us at the moment.”
The healthcare sector is increasingly being disrupted, with a wide range of start-ups emerging in the field developing technologies such as 3D printed ears, apps to remind people to take their medication and wearable tech for the treatment of Parkinson’s disease.
Global Kinetics raised $14.8 million to expand to the US in 2015, medical software company HealthKit raised $1.6 million last year and the government has launched a $500 million Biomedical Translation Fund.
But Dr Tan said the sector was still at the start of its digital transformation.
“Healthcare is a long-fuse, big-bang type market. It takes a long time to get anything happening because it’s such a conservative industry,” he said.
“The fact a marketplace like ours is still solving these issues tells you the sector is a bit behind, but that doesn’t make the tech less interesting.”