Perth-based HealthEngine has shown that investors still have an appetite for quality tech companies, announcing today it has raised $26.7 million from venture capital and private equity investors in a deal led by major global player Sequoia India.
Perth-based HealthEngine has shown that investors still have an appetite for quality tech companies, announcing today it has raised $26.7 million from venture capital and private equity investors in a deal led by major global player Sequoia India.
HealthEngine, which runs an online healthcare booking service, will use the proceeds to add to its product portfolio, expand into other markets and make acquisitions.
It also plans to add to its team of more than 100 staff, who work from its headquarters in Perth and satellite offices in Melbourne and Sydney.
Founder Marcus Tan said the business needed an investment partner with a breadth of expertise that would help the brand achieve its potential both in Australia and on the global stage.
“This investment announces HealthEngine’s arrival on the global startup scene, hopefully putting us on a similar trajectory to many of Sequoia’s other successes,” Mr Tan said.
These successes include iconic companies Apple and Google and more recently startups like Whatsapp, Stripe and Airbnb.
The funding marks Sequoia India’s first direct investment in an Australian owned and headquartered tech startup.
Mr Tan said this week's deal increased the value of all capital raisings by HealthEngine to nearly $50 million, including a $10.4 million deal in 2013 and a $5 million raising in 2016.
In contrast to most other successful tech start-ups founded in Perth, which have either listed on the ASX or moved interstate or overseas, HealthEngine remains privately owned and based in its home town.
Mr Tan said he had evaluated an initial public offering but strongly preferred staying private.
"If you can raise the money privaely, I don't think anybody would choose a public listing."
He said Sequoia contributed more than half to the latest funding round.
As well as Sequoia, new investors include private equity fund Alium Capital and several high net worth family offices.
Follow-on investors included Perth-based investment fund Go Capital, Carsales.com.au founder Greg Roebuck, and the founders of Sydney-based e-commerce company Lux Group, including chief executive Adam Scwab.
HealthEngine enables patients to connect online and make appointments directly with health practitioners in their area.
One million Australians and tens of thousands of practitioners use HealthEngine every month.
Its major direct competitor is ASX-listed 1st Group, which said last month more than five million appointments have been booked on its platform since 2012.
For the half-year to December 2016, 1st Group reported revenue of $976,952 and a net loss after tax of $2.6 million.
1st Group completed a $5.3 million IPO last year after acquiring three existing businesses – Gobookings Systems, Clinic Connect and DocAppointments.com.au.
Mr Tan declined to provide details of HealthEngine's financials, but noted that his business has taken more thna eight million bookings and has significantly more revenue that 1st Group.
Sequoia principal Pieter Kemps said healthcare is an enormous sector ripe for innovation globally.
“HealthEngine has done particularly well to become a market leading digital health company in Australia,” he said in a statement.
“They have built the foundation of a powerful health experience platform that improves the lives of patients as well as healthcare practitioners.
“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.
“We look forward to working with them to do just that.”
Sequoia India will join Telstra Ventures and Seven West Media on the HealthEngine board.
Dr Tan – a former 40under40 award winner – said the healthcare sector impacts every Australian but has been slow to adopt many of the advances seen in other industries.
“Our goal is to improve the health of all Australians by providing a platform that enables both timely access to quality care and a seamless patient experience,” Dr Tan said.
“We’re empowering patients to access and manage their healthcare through better information and technology.
“We’re also helping healthcare professionals be more effective and efficient within their practices, which ultimately leads to better care provision.”
Mr Tan said the latest raising was managed internally, without the use of any external financial advisers.
