March 15, 2018
On January 22, 2018, if you were anywhere near 525 S. Meridian St. in Indianapolis, you might have felt an electricity in the air. The team at Springbuk had struck a deal for $20 million in Series B financing, in which Elevate Ventures participated. It was one of the largest rounds in recent history for an Indianapolis-based software company, and they had reason to celebrate. It meant the team had further validated the business and market, and were in a better position to grow.
Phil Daniels, a Springbuk Co-Founder, knew this achievement didn’t happen overnight. The path to becoming the nation’s leading employer-facing health intelligence software had been paved with milestones achieved along the way.
Many entrepreneurs and startup leaders dream about a $20 million investment. It’s monumental. To break down how Springbuk got here, we asked Daniels about critical targets the company reached along the way.
MILESTONE 1 (2009-2011):
Uncovering the need for a health analytics solution via the “Healthiest Employer” program.
In 2009, Daniels partnered with Rod Reasen, now Springbuk’s Co-Founder/CEO, to help grow a benefits consulting firm. As part of that effort, they sought to understand what employers were doing to address rising healthcare costs and unhealthy workforces. To collect this data, they launched an awards program to recognize employers who were investing in the health of their employee populations. To determine which employers deserved recognition, the team needed data about where companies were investing and what outcomes were happening.
Over 100 companies competed for the “Healthiest Employers of Indiana” Award. Over the next two years, the Award program expanded to more than 40 U.S. cities and attracted thousands of employer applicants.
When responses were analyzed, a glaring challenge came to light. Few employers were managing “reporting and analytics” well. The insights from “Healthiest Employers” took on a life of their own.
“The need for tracking healthcare spending and outcomes hit a nerve in the employer community,” Daniels says. Reasen and Daniels found themselves honing their presentation skills and being served a lot of airline snacks as they passed through 27 airports, spoke to 44 different crowds, and visited top employers like Nike, Dell and Target to talk about the program. The company’s program was being utilized in nine U.S. cities in 2010, 44 in 2011.
By the end of 2011, Daniels and the team recognized the incredible demand for health analytics, but they did not yet have a marketable software to solve the problem.
MILESTONE 2 (2013-2015):
Going to market with early iterations of the product.
The team had a vision of a singular place that made it possible for employers to accurately track and measure return on investment on their healthcare spend in order to make improvements and manage risk.
“The entrepreneurs’ gut says, I have to keep this under wraps. And we probably stayed too quiet too long because of that fear,” Daniels says, but in 2013 they started telling customers about their product idea and gauging interest. “Getting that user feedback was the biggest step we could take to developing a commercialized product.”
In 2013, they raised angel investment capital to build a minimum viable product (MVP) so they could begin to present what they were building toward. The following year, the team dove into full development and commercialization.
“During those early sales meetings, if you clicked three times during the demo, you were done. But while the MVP lacked product depth, it allowed us to successfully sell the vision,” Daniels says. In 2014, the team set a goal to get some testing clients, and by 2015, Springbuk publicly launched the software. Nearly 300 employers signed up by year end.
Milestone 3 (2016-Present):
Hiring a senior leadership team that could take Springbuk to the next level.
During Springbuk’s early fundraising round, Daniels says it was important to find a partner like Elevate Ventures that wanted to invest long term, had the ability to support future growth, and could help position Springbuk to attract top talent.
“It also helps that Elevate is very much aligned with our Midwest values and thesis that great companies can be built here,” he says.
By May 2016, nearly 500 employers were using the Springbuk platform. Momentum was high, and then Springbuk announced it had secured $3.75 million in Series A financing to be used to fuel strategic hiring and product innovation.
A funding milestone like this can often de-risk a career move for potential employees. Leaders in stable jobs can feel more confident joining a growing company like Springbuk when they know there is significant financing backing it.
But it was certainly about more than money. Daniels says they were well aware how painful it could be to hire too quickly or without purpose. They had to get the culture fit right from the beginning, especially as they anticipated growth from eight employees to 22 employees to more.
Reasen and Daniels visited other companies in town, “Best Places to Work” winners and respected leaders, to listen and learn from them. They built out the values of the company, designed an employee recognition program and put someone in charge of the employee brand experience and culture.
“We were really intentional in building and setting culture,” Daniels says. The attention is paying off. Springbuk got on the Indiana Chamber of Commerce’s list of Best Places to Work in Indiana in February 2018. Its employee retention rate is strong, and it’s up for Techpoint’s 2018 Mira Awards “Company Culture Of The Year” award.
MILESTONE 4 (2017):
Crossed the 1,000 mark for number of employers using Springbuk.
Today, 1,300 employers use the Springbuk platform. Hitting 1,000 at the end of 2017 not only increased market share, but also fueled product development. Daniels affirmed that reaching the 1,000-user mark was an external validation for the team, its customers and prospective customers. It continued to confirm the product-market fit and growth plans.
“From the very beginning with the ‘Healthiest Employers’ Award, we set out to help the employer solve a huge problem in this country. Our tools have changed, but with Springbuk our mission and values haven’t,” he says.
MILESTONE 5 (January 2018):
Springbuk announces $20 million Series B Round.
“The Series B financing is wonderful for growing and hiring, but it’s more a testament to the industry and our team, who were very involved and visible to potential venture capital partners interested in us. It’s also a testament to Indy as a place to build high-value, scalable software companies,” Daniels says.
Those who invested in Springbuk saw the benefits of investing in Midwestern values and pragmatism — we build real businesses here. If you have chosen to build and grow a business here in Indiana, consider that a milestone you’ve already reached.
For help reaching your next business target whether it be assistance or investment, visit ElevateVentures.com.