Healthengine numbers down after Covid

Perth-based consumer healthcare platform Healthengine has dipped further into the red, with its annual report revealing an operational restructure as well as a significant board overhaul over the past year.

The company, which has a platform through which patients can book appointments for doctors and other health professionals, made a net loss of $8.1 million for the year ending June 30, a 32 per cent increase on the previous year’s loss of almost $6.1 million.

Healthengine’s revenue dropped 7 per cent in the same period to $20.3 million from $21.9 million.

In its annual report the company said it had restructured its operations in April to cut $2.5 million in costs per year and focus on “reducing cash burn and accelerating its pathway to profitability”.

In explaining the reduction, it said the 2021-22 financial year’s revenue included a $3.5 million contract from the Australian government’s Commonwealth Booking Platform for the COVID vaccine rollout. That contract ended in June 2022.

“Excluding the impact of the CBP contract, operating revenue increased 13 per cent year on year,” the company stated in its directors’ report.

In terms of personnel, Healthengine has undergone significant change in the past year.

Five directors have stood down in the past 12 months, including co-founder and founding chief executive Marcus Tan, who quit both the executive and the board in June.

He was replaced as CEO by former Guardian News & Media Australia and New Zealand managing director Dan Stinton.

Another four directors left the board in October last year: venture capitalist Andrew Larsen, Seven West Media executive Alexander Beer, Sequoia Capital investment adviser Pieter Kemps and Liverpool Partners managing partner Brad Lancken.

That leaves a three-person board headed by experienced director Susan Forrester, iiNet and Seven West director Michael Malone and Telstra Ventures managing partner Matthew Koertge.

In 2009, Dr Tan and family friend Darius Wey built HealthEngine, with the support of investor Adam Yap, on the foundation of another application created in 2006 by Perth doctors Mike Cadogan and Colin Parker who were struggling to make their technology a success. Dr Tan, also a practising physician, had given up on a similar project started around the same time. Mr Wey and Mr Yap both remain as key executives, but neither is listed as a director.

Both Seven West and Telstra Ventures were early funders of the Healthengine startup, while Silicon Valley major Sequoia also came on the register in 2017 when it led a $26.7 million raising venture capital, heralding a significant step change for Western Australian startups.

The business has raised about $80 million over five major fundraising efforts, including $20 million in early 2022, led by Sydney-based investment group Inspire Impact.

Healthengine said in its annual report that demand for digital health services continued to increase and pointed to its telehealth service which had seen significant growth, as had its new pharmacy-focused business.

“The growth in these newer revenue streams was tempered by a 6 per cent decrease in revenue from GP (general practitioner) services due to a decline in demand for marketing services from GPs during the year,” Healthengine said.

Healthengine did not disclose competitive pressure as an issue however Melbourne-based Hotdoc has become a well-known player in the same space.

Hotdoc is backed by an Airtree Ventures fund and Ramsay Health Care Ventures.

Australian Securities and Investments records show Hotdoc raised more than $20 million up to 2020, however it is unclear if a publicised $30 million raising took place in late 2021.