Billion Dollar Unicorns: eClinicalWorks Bootstraps With A Paycheck

According to a 2014 Accenture report, the global market for electronic health records (EHR) is projected to grow to $22.3 billion in 2015. North America is expected to remain the biggest region in the industry, growing 7% annually to bring in $10.1 billion. Westborough, Massachusetts-based eClinicalWorks is a growing force in the industry and a proud member of the Billion Dollar Unicorn club member. What’s more, the company was bootstrapped with a paycheck.

eClinicalWorks’s Offerings

eClinicalWorks was founded in 1999 by Girish Kumar Navani. The idea for eClinicalWorks came to him when he attended a conference on wireless technology and its impact on different applications. At the conference, Girish heard a speaker’s vision of wireless technology in healthcare where a doctor can record information such as writing prescriptions and ordering lab tests over electronic devices and capturing data while attending to patients. That thought led to the vision of wanting to digitize healthcare to eliminate paper from a doctor’s office so that all communications between the doctor, pharmacy, and lab would become electronic.

They soon built their product and started selling it to physicians. Today, eClinicalWorks is a leader in ambulatory clinical solutions. Their solutions extend the use of electronic health records beyond the doctor’s practice to the larger health provider community. Through their products, providers can benefit from practice management solutions that help them manage appointments, schedules, and information about patients. Their patient-facing portal enables communication between the patients and providers using SMS text messages, voice mail services, and e-mails.

As part of their growth plans, eClinicalWorks is investing heavily in R&D efforts. In 2014, they had plans to invest $75 million in Healow, their Health and Online Wellness R&D unit. Through these investments, they are planning to improve healthcare services for both patients and providers. For instance, they believe that they should be able to provide Uber-like apps for healthcare services that will at least tell the patient what a procedure will cost. For providers, they should be able to improve marketing efforts and drive higher revenues.

eClinicalWorks’s Financials

eClinicalWorks operates on a monthly subscription model for their services. They offer their basic cloud-based package at a monthly fee of $449 per provider. Providers can purchase premium options thst include practice management and billing services at higher prices ranging from $599 per provider to a variable model of 2.9% of practice collections. The company does not disclose detailed financials. But in my interview with Girish in October 2014, he mentioned that they were trending at annual revenues of $320 million compared with $100 million recorded in 2010. Analysts estimate the company to be worth nearly $3 billion.

They currently have over 100,000 physicians, more than 50,000 facilities, and nearly 600,000 healthcare professionals using their platform. They helped process $41 billion in claims in 2013.

eClinicalWorks has been bootstrapped so far. Within the first three years of operations, they had sold their product to 500 physicians. At average revenues of $400 per month per provider, they were able to sustain their business even then.

They have not gone to VCs for funding and their only investors are the founders. They wish to remain a private player and not list. The R&D investments are eating into their profits, but they are confident of their product and are convinced that they are building a cloud company that is able to stand on its own feet.

Last week, Girish joined me at a roundtable conference. You can listen to the recording here.

More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns. The term Unicorn was coined in a TechCrunch article by Aileen Lee of Cowboy Ventures.

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Photo: Erin Stevenson O'Connor/Flickr.com.