A startup moving through our value chain

The story of how Welo Health came through each stage of our value chain started just a few years ago, amidst the global pandemic. While this is not the usual start to any success story, it showcases one startup’s resilience in uncertainty – and why opportunities can come from unexpected places.

During lockdown, founders were feeling more disconnected and discouraged than ever before. Keet van Zyl of Knife Capital decided to act – and started running online coffee meetings where entrepreneurs could join him for a chat and tell him about their company. Zanele Matome jumped at the chance to introduce herself and her startup, Welo Health.

As an early-stage innovation-driven company, Welo Health wasn’t quite ready for Grindstone’s growth engineering programme or series A funding. However, as a partner of Grindstone (50% owned by Thinkroom) and a pivotal part of our value chain approach to startup growth, Keet knew exactly where to direct her. And the rest, as they say, is history.

Keet introduced Zanele to Thinkroom, which led to Welo Health’s invitation to join Thinkroom’s ESD programme with Hitachi. This opportunity paved the way for Welo to join the next Grindstone accelerator, a crucial step in qualifying for Grindstone Ventures funding. This progression propelled Zanele to the next step of the value chain with Knife Capital, a discussion with Julian Draper. As Knife’s FIND and ESG specialist, Julian plays a pivotal role in identifying promising companies poised for expansion – and potentially, series A or series B funding.

As Welo Health grows its customer base and revenue, they present a fantastic case study for our value chain approach.

Welo’s successes at a glance:

● After completing the Hitachi ESD programme with Thinkroom in August 2021, Welo officially became a supplier of onsite medical solutions to Hitachi Construction Machinery’s mining clients in September. Welo received their first order in October that same year.
● Joined Grindstone’s cohort 11 in 2022, receiving the prize for “Outstanding improvement in NETWORKS” on graduating from the programme. Funding enabled through Grindstone Ventures.
● Launch of Welo Care in April 2024, their all-in-one healthcare solution with a monthly subscription model targeted at employers (B2B). This includes doctor consultations, home or workplace medicine delivery, and nurse visits, for R355 per month.
● Current revenue of R400 000 per month achieved on standalone products, namely Employee wellness days and Occupational health. Projected revenue to increase to R1.6 million/month once Welo reaches full capacity for these products.
● WeloCare monthly revenue starts at R460 000/month after onboarding 2000 drivers of a new client, Qiktruck, with revenue projected to increase to R2.9 million per month through onboarding the additional 11 000 drivers.
● Client list: QikTruck, Hitachi, Umvuzo Health, Rtusa Insurance, Frigoglass and currently in talks with Discovery Health.


An Uber for Health

When Welo launched in 2020, founder and CEO Zanele Matome’s vision was to create an “Uber for health,” delivering essentials like food and medicine to consumers. With Zanele’s burning desire to create measurable impact, combined with in-depth market research, they decided to pivot towards a different model: providing healthcare at home and the workplace by merging technology with the human touch.

When Zanele reached out to Keet van Zyl on Twitter a couple of years ago, she had no idea where this step would take her. Earning points for proactivity, the eager entrepreneur became part of our ecosystem, first joining the Hitachi ESD programme under Thinkroom, before joining cohort 11 of the Grindstone Accelerator in 2022.

In London to speak at Oxford during March 2024, Zanele met with Julian Draper, one of Knife Capital’s London-based partners, to discuss Welo’s progress since she last met with the team. With a multifaceted professional background spanning private equity, venture capital, wildlife conservation, and motorsports, Julian brings a unique blend of expertise to Knife Capital. As the firm’s FIND and ESG specialist, he plays a pivotal role in identifying promising companies poised for international expansion that align with Knife’s environmental, social, and governance (ESG) objectives.

Julian: Zanele, tell us about the Welo healthcare model?

“Welo Health operates a cutting-edge HealthTech platform that aims to revolutionise healthcare delivery, in partnership with corporate clients and health insurers. Welo’s clients can access a suite of wellness-based services, including remote counselling, financial wellness services, health assessments, on-demand access to verified nurses, dashboards for real-time employee health monitoring, and virtual consultations from their phones or laptops. Our digital health platform connects individuals, businesses, and healthcare workers, providing on-demand healthcare services and contributing to job creation.”

Zanele told Julian how the company started with a B2C focus, only to pivot to B2B when they realised that their model could provide corporate clients with a convenient and cost-effective way to improve employee health and wellbeing, minimising healthcare costs and providing a valuable employee benefit that will help their clients attract and retain top talent. “Our hybrid service is how we beat our competitors,” said Zanele. “Even though we serve the individual user, we are targeting the B2B market because payment is made by the employer or health insurer.”

Julian: Welo Health is poised to address a fundamental need: making healthcare accessible to everyone. Can you share some information about your plans in this regard?

“We’ve currently got a backlog of 8,000 Stockvel members eager for our services, and we want to address their needs too. So, we’re gearing up for Series A funding to broaden our offerings to reach more of the B2B and B2C market,” said Zanele.

“This year, we’re launching ‘Welo Care,’ which consolidates all our services. Welo Care came out of our need for consistent revenue streams and a desire to meet our customers’ needs every month. At R355 per month, ‘Welo Care’ provides doctor consultations, home or workplace medicine delivery, and nurse visits, offering an all-in-one healthcare solution,” Zanele explained.

“Our inaugural ‘Welo Care’ client, QikTruck, brings 13,000 truck drivers into our fold. We’re starting with the initial onboarding of 2,000 drivers paid for by QikTruck, and the onus is on us to sign up the rest of them. Even though we launched Welo Care as our Minimum Viable Product (MVP) with only basic capabilities, QikTruck wanted to start immediately. Our partnership allows us to demonstrate our Proof of Concept (POC) with QikTruck and that our tech is ready to go. For the other 11,000 employees of QikTruck, the company is offering a 50% reimbursement on Welo Care. While the company can choose to fully or partially subsidise Welo Care, the employer is responsible for payment.”

Julian: What is Welo’s plan around sales and pipeline for Welo Care?

Welo has four key corporate clients under its umbrella: QikTruck, Hitachi, Umvuzo Health, and Frigoglass. In addition, negotiations are underway with Discovery. “Most of our clients were word-of-mouth referrals. Frigoglass is a company with 400 employees that we are onboarding after a referral, and even QikTruck reached out on social media to say they want to work with us.”

“Our sales strategy is two-pronged: targeting smaller enterprises with 50 to 700 employees (because then you only need to talk to two people) and nurturing relationships with larger clients, such as Old Mutual, with longer sales cycles. I’ve hired additional sales support to handle smaller accounts so I can dedicate more attention to larger clients.”

“The sales cycle for smaller companies typically spans up to four months; in the case of QikTruck and Hitachi, it was even less. Our goal is to acquire thirty smaller clients, bringing our monthly revenue projections between R1.6 to R1.8 million a month. Of course, we don’t ignore the clients with 250 000+ employees; we just know it’s a longer process. By increasing our focus on a wide range of smaller clients, we add value, get good feedback and maintain flexibility to pivot if needed.”

Julian: What kind of traction have you achieved over the last financial year?

“As of February 2024, the conclusion of our last fiscal year, we saw a revenue of R400,000 per month. While this figure may seem small, we’ve gradually established traction and built a solid team since our launch.”

Our biggest challenge? “Technology! You don’t know what you don’t know. As a non-technical founder, I would throw money at a problem without fully understanding it. So, we’re doing it the right way. Streamlining our tech development is crucial for us to scale. Our team of seven now consists of two in-house developers, a resident doctor responsible for compliance and overseeing the team of consulting doctors, and a newly onboarded lawyer on retainer. Currently, we’re collecting and holding the data while refining our technology to ensure functionality, analysis, and compliance.”

Julian: Can you tell us a bit more about your next funding raise?

“In approximately 18 months, we anticipate a Series A funding round to secure between $10 million and $15 million. This milestone aligns with reaching a minimum monthly revenue of $2 million, a target we are confident of achieving. Our partnership with QikTruck has promising growth potential as we transition their entire workforce onto our platform. Furthermore, by onboarding another client, the SA National Taxi Association, we will generate an estimated R4 million in revenue over 11 months ($215,624), offering a steady cash flow with the potential for renewal. In addition to these revenue gains, we foresee a bridge round with a maximum of $200,000 within the next three months.”

Julian: What is your strategy for revenue and cash flow going forward?

“Ensuring consistent cash flow remains our priority, especially considering the typical payment cycles of 30 to 60 days in B2B transactions. Our strategy to mitigate this challenge involves expanding our client base to diversify revenue streams, thereby reducing reliance on individual payment cycles. While profitability through corporate sales is satisfactory, insurance companies offer lower margins than corporate clients. We developed Welo Care to maximise revenue from our corporate clients, meeting diverse needs while maintaining profitability.”

“We’ve evolved to meet the needs of our patients, end users, and clients,” Zanele continued. “By having our heads to the ground, we relate to the people we serve. So, whether we provide solutions at home or the workplace, everybody wins by using our products and technology. We believe that merging tech with the human touch is what will bring us greatness.”

Visit welo.health to find out more about this amazing company!

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