Healthwire sold software to doctors first, then went back to the patient
The Pakistani healthtech began as a booking app, found that doctors would pay for software instead, and now also sells medicines and pharmacy franchises. The money it raised was less than it asked for.
Healthwire began in 2015 as a way to book a doctor, found that doctors and hospitals were not ready to use it, and spent the next five years making its money by selling them practice software instead. In October 2020 it said it planned to raise $4 million to $5 million within about twelve months to go back to patients. It raised $3.3 million in December 2021, which is 66 to 82 percent of that range. Its website today shows where the money went: a pharmacy, lab tests and a pharmacy franchise scheme, next to the software that paid the bills.
Software first, because doctors would pay for it
Founder and chief executive Hamza Iqbal told MENAbytes in October 2020 that the booking product came before its market, so Healthwire built cloud software to run practices and hospitals. Doctors paid a monthly subscription, and so did hospitals and clinics that wanted a central system. At that point the company counted 3,500 doctors and 75 hospitals across 52 cities, all paying.
A subscription has one property a booking marketplace lacks: it is paid whether or not a patient turns up. For a young company selling into a market where few doctors had tried software, that predictability bought time. It also gave Healthwire supply before it opened a marketplace. Khurram Zafar, country manager of its investor 47 Ventures, said the company had executed flawlessly to acquire the largest supply side share of the healthcare provider space.
The spread was thin, though. Divide 3,500 doctors by 52 cities and the average is about 67 doctors a city. A booking app needs several choices in every neighbourhood before a patient can rely on it, so the number of doctors mattered less than where they were. The company has not published a city by city split, and it has not said what a subscription costs, so the revenue this base produced is unknown.
Going back to the patient
With doctors on the software, Healthwire relaunched the booking platform, and here the model changes. Doctors pay Healthwire a cut of each successful appointment. The company has not disclosed the percentage. Iqbal said that many doctors in Pakistan already work with hospitals on a revenue share basis, which makes a commission familiar rather than strange.
The magazine's view is that this is the sound part of the plan. A doctor paid per patient values a new patient directly, and will accept a commission on one far more readily than a flat fee for software that does not change how many patients come through the door. The weakness is leakage: once a patient has a doctor's number, nothing stops the next visit from being booked outside the app, and a commission model has no defence against that except convenience.
The $700,000 pre Series A round it announced in October 2020, led by 47 Ventures, was meant to fund the consumer side: appointment booking, health record storage, and ordering medicines and lab tests.
The 2021 round and a wider scope
The Series A was announced in December 2021 at $3.3 million. The investors were 47 Ventures, HBL, Dilsons Private Limited and angel investors from Silicon Valley. Healthwire said it would use the money to become the healthcare super app of Pakistan, and described a platform with thousands of providers in more than 60 cities, connecting more than 10,000 patients with doctors every day. Cofounder and chief technology officer Muhammad Nabeel said the patient and doctor interaction is the point where the whole healthcare system converges. Sagheer Mufti, HBL's chief operating officer, said the bank was excited to invest because Healthwire is an integrated healthcare digital platform.
The magazine's arithmetic: the two announced rounds add to $4 million, which is only the bottom of the Series A range Healthwire named in 2020. The 2021 money on its own was $700,000 short of that lowest figure.
What the site says today
Healthwire's own site now lists more than 10,000 doctors onboarded, a presence in 75 cities, more than 150,000 live consultations and more than 2,000 app installs. It gives $3.3 million as the funding raised, which matches the Series A alone. It sells medicines with delivery, advertised at up to 10 percent off, and lab tests from partner labs at up to 28 percent off. It also offers a pharmacy franchise and promises a 40 percent annual return on investment.
The pharmacy line is the newest and has the least room for margin. The government sets both medicine prices and retailer margins, according to 500 Global's reporting on the sector, which limits what any seller can discount. A discount of up to 10 percent therefore has to come out of the seller's own margin or from a lower buying price. The franchise return is a company claim, and the page does not say how it is calculated or what costs it assumes. For a franchise owner those costs would include rent, staff and stock, none of which the page quantifies.
Each of the three businesses earns money differently, and that is the real test of the plan. Software brings a fixed monthly fee that does not depend on volume. The booking platform brings a share of each appointment, so it grows only if patients keep choosing the app. The pharmacy earns whatever margin the government leaves, and a franchise scheme passes part of that margin to the owner. The magazine's view is that the first of these pays the bills while the other two carry the risk, because they need patients, stock and trust that the software business never had to win. Healthwire has not said which of the three produces most of its income.
What is not disclosed
Healthwire has not disclosed revenue, the split between subscriptions and commissions, subscriber churn or the price of its software. The December 2021 Series A is the latest round announced.
