Tushar Vashisht, co-founder and CEO, HealthifyMe; Image Courtesy: HealthifyMeJuly 2014, BengaluruT
he ‘Iron Man’ had burnt all his calories. “We have run out of money. I can’t pay salaries,” lamented Tushar Vashisht, who broke the news to his 20-member crew on a drizzly July afternoon. Co-founded by Vashisht and Mathew Cherian in 2011, digital health and wellness startup HealthifyMe had raised a crore in angel money in 2012, and two years later, the runway had come to an abrupt end. “You are free to leave, but I will be here tomorrow morning, raring to face another day…” announced the co-founder and CEO. The first-generation founder, who had gained over two dozen kilos once he came back to India in 2010, was confronted with a grim reality: All his startup had gained was empty calories.
HealthifyMe lacked muscle. The three-year old venture, which had started from a farmhouse in Delhi with a mission to help people count calories, track food and lead healthier lives, had failed to keep a track of its own financial health. To be fair to the rookie founders, the first year was spent in looking for evangelists who could believe in the vision of calorie counting and food tracking. “Who better than doctors and hospitals,” the enterprising duo had said to themselves.There was one small problem, though. The doctors were sceptical, and the hospitals couldn't make sense of their hour-long passionate pitches. “Our ideas seemed to be ahead of their time,” recalls Vashisht, who booked paid consultations with hundreds of diabetologists just to get their time. In fact, he even came up with the idea of ‘urinator pitch’—pitching an idea to a senior diabetologist in the toilet. But nothing worked. Now, in July 2014, HealthifyMe didn’t have many options. “We almost died,” recalls Vashisht, a University of Pennsylvania graduate, who began his professional innings in 2007 with Deutsche Bank in the US, then shifted to Singapore and was done with his banking gig towards the beginning of 2010.
Though in July 2014, Vashisht was grappling with a ‘near-death’ experience, in October 2011, the 26-year old investment banker was trying to figure out a ‘survival’ issue. “How can people survive on Rs32 a day,” wondered Vashisht, who quit his high-paying job at Deutsche Bank, came back to India and joined Nandan Nilekani’s UIDAI project (Aadhaar) in January 2010. Reason: He wanted to be in a job that had massive impact. So the erstwhile ‘wealthy banker’ started his second innings on zero salary. He soon found another non-conformist in Cherian, who happened to be an MIT alum and had joined UIDAI. In the latter half of 2011, the mavericks decided to do something audacious.The trigger was equally outrageous. In September 2011, the Planning Commission had filed an affidavit in the Supreme Court informing that a family in urban and rural areas can sustain at Rs32 a day and Rs26 a day, respectively. “Really,” exclaimed the colleagues at UIDAI, and decided to find the reality. “Unless I lived on that income, I would have never realised the ground reality,” he recounts.
Rs32, Rs100, and loss of weight
For a month, the duo tried living on Rs32. The experiment bombed. Both lost a lot of weight, their cholesterol and blood sugar dipped to an alarming level, and working abilities were hampered. “Living on Rs32 was unrealistic. So we tried living on Rs100,” he recalls. Though the new gig was equally challenging, both somehow managed to sail, and realised that there was no way to measure the calorie count of foods. “At Rs100, it was still better as we could have eggs and all to get the necessary amount of protein,” Cherian reportedly said in a media interaction in November 2011. “But at Rs32, you are having 80-90 percent of calories from carbohydrates,” he added.
Now, in 2014, HealthifyMe founders neither had Rs100 nor Rs32 to buy carbohydrate, protein or run their venture, which had exhausted Rs1 crore of angel money. With zero calories and zero money, a beleaguered Vashisht tried to lift the morale of his team. “Some companies exist because they can. Others get lucky. Yet others defy all odds and exist even when there is no reason to exist,” he underlined in an email sent to employees. “We fall in the latter,” Vashisht reiterated.HealthifyMe, Vashisht reasoned, had a compelling reason to exist. In July 2014, the health and fitness platform had over 50,000 users. What this meant was two things. First, there was a pressing consumer need. Second, there was a product-market fit. What Vashisht and his gang failed to realise was a grim reality that HealhifyMe business model lacked monetisation. Yes, there were thousands of users, but all were for free. The immediate task of surviving gained precedence. Vashisht and senior management dipped into their savings, and did what any struggling startup would do: Borrow from friends, family and mentors like Raj Mashruwala [advisor and angel investor], Bala Parthasarathy [co-founder, MoneyTap] and Gopal Srinivasan [TVS Capital Funds]. The venture, consequently, got much-needed oxygen.The startup, though, was still on ventilator. Vashisht went back to the drawing board with his team, and tried to figure out how he could monetise. “What are the things our users would be willing to pay for,” was the question. The answer was nutritionist and trainer services. They put in place a strong sales and service machinery, and by the end of 2014, HealthifyMe was clocking Rs3 lakh a month. By the end of 2015, the numbers leapfrogged to Rs20 lakh per month. Early next year, the startup managed to raise $6 million from Inventus Capital, IDG Ventures and Blume Ventures.Investors came, but the problem persisted. HealthifyMe was still a 26 percent gross margin business. “Who would fund a 26 percent gross margin business, which is not very scalable, lacks a technology-led model, and was still service-oriented,” says Vashisht, explaining why it was still hard to get wider backing and bigger commitment. “Without artificial intelligence (AI), our monetisation wasn't good enough for investors,” he says, adding that to scale, train the coaches and build a low-cost model, artificial intelligence was the need of the hour. “We're always inspired by Iron Man, and he had a Jarvis [AI assistant],” says Vashisht, adding that HealthiFyMe needed its Jarvis. Also read: 63% of corporate India is overweight
Intelligence, AI & Ria
Enter Ria. In October 2017, HealthifyMe rolled out Ria, an AI-enabled nutritionist. Ria, points out Vashisht, would use learnings amassed from over 150 million tracked meals, and 10 million message exchanges between coaches and clients. The AI nutritionist was equipped to answer questions around nutrition and fitness in over 10 languages and could provide personalised responses based on users' lifestyle habits. But what Ria did was much more than Q&A, explains Vashisht. Ria identified not-so-healthy foods such as vegetarian mayo sandwich, kachoris, samosas, rolls, ketchup, croissants, frankies, pakoras, and then suggested healthy replacements like roasted kala chana, tomato soup, besan cheela, veg poriyal, veg dalia, curd, oats, flaxseeds and rava upma.Users lapped up the feature, and the gambit worked.Next year, in 2018, HealthifyMe bagged $18 million from a bunch of investors including Sistema Asia Fund, Samsung NEXT, Atlas Asset Management and Dream Incubator. In 2019, came another turning point. HealthifyMe launched ‘Smart Plans,’ which saw Ria’s evolution into a health consultant and consumers being offered AI-powered diet plans at less than $4. The founder also rolled out ‘Coach Plus Plans,’ customised plans, including doctor consultations, to control lifestyle diseases. “While Smart Plans were around Rs200 a month, Coach Plan was for Rs2,000 a month,” recalls Vashisht, adding that both the plans changed the growth trajectory of the startup. Suddenly, the app became accessible, and scale and monetisation went hand-in-hand.Fast forward to June 2023. HealthifyMe raised $30 million in a Pre Series-D funding round led by LeapFrog Investments and Khosla Ventures, along with Finnfund and Van Lanschot Kempen, a Dutch investment firm. Existing investors Unilever Ventures, Chiratae Ventures, Blume Ventures and HealthQuad also participated in the round that also included a small portion of venture debt. HealthifyMe, Vashisht underlines, is set to augment the capabilities of Ria by infusing it with generative AI. It is also retrofitting its coach facing system with generative AI to create a strong nutritionist and trainer ‘co-pilot.’ “We've already demonstrated how blending human coaching and AI, enriched with users' health data, can transform millions of lives,” he says. “Now, with generative AI, we're supercharging our mission,” he adds.
Revenues have leapfrogged from Rs86.05 crore in FY21 to Rs185.25 crore in FY22. The startup claims to have over 35 million users, 1,000+ coaches and a presence in 300 cities in India and abroad. In fact, 20 percent of revenue comes from outside India. “I have been tracking HealthifyMe for a few years now. What they have achieved in India with their AI coaching solution at scale is truly pioneering for the world,” reckons Vinod Khosla, founding partner at Khosla Ventures. “We are excited about the potential as they scale globally, specifically in North America, where two out three adults are overweight or obese,” he adds.The backers are equally super-charged with the pace of development. For LeapFrog, HealthifyMe is an impact investment. Investing in prevention and treatment of chronic disease and underlying drivers, such as obesity, has long been a focus for LeapFrog’s health care team, says Biju Mohandas, partner and global co-leader for health investments at LeapFrog. HealthifyMe, he reckons, has created a powerful intersection between health and technology that can be accessed by millions of smartphone users from India’s metropolitan cities to small rural towns.In spite of rapid progress over the last three years, especially after the pandemic, HealthifyMe has a ballooning weighty issue to fix: Losses. FromRs 19 crore in FY21, they have jumped to Rs157 crore. Vashisht reckons that growing sustainably is not an option but a necessity. While the topline has grown by around 20 percent in FY23, the losses have been slashed by more than half, he claims. “We have not moved fast,” he says, sharing one of the mistakes he made in over a decade of his journey. “It took us 11 years to each here,” he adds, pointing out one of the underlying issues. Though the startup was always sure about the mission, there was hesitancy in terms of conviction. “When we were sure, we moved. But when we lacked conviction, we didn't,” he says.
Now that HealthifyMe is on a firm growth trajectory—insights about what works and what doesn’t, capital, talent and motivation—can it chart a different trajectory of growth? The Indian ‘Iron Man’ prefers to answer by dishing out the quote of the original Iron Man Tony Stark. “Jarvis… sometimes you gotta run before you can walk.” It’s time for Vashisht to put on his running shoes.