Healthtech startup stays focused on the mission

HEALTHTECH startup Halodoc's founder Jonathan Sudharta has a personal mantra: don't fall in love with the solution; focus on the problem.

Illustrating the value of this mantra, he recounts a tie-up his company had with an insurance group to deliver medication to patients after physical consultations.

Mr Sudharta had been "amazingly proud" of this solution after it was rolled out, and over lunch with the chief executive of the insurance company had even discussed campaigns to market the solution.

The same day, he was brought to earth by a call from his chief technology officer to say the product should be killed. It was a hassle to use, and after a few months only two people had signed up.

"I said: 'What? I just had lunch with the CEO and you want to kill the product?' But he brought the reality home, and I realised I was falling in love with my solution without even thinking about what problem I was trying to solve."

This mantra has helped Halodoc to stay mission-driven even as it faces the usual commercial and financial pressures of a startup needing to satisfy investors.

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Halodoc, based in Indonesia, has a mission of making healthcare accessible for all. Its digital platform connects users with more than 20,000 licensed doctors for online consultations. Medication is delivered from over 4,000 participating pharmacies to homes within half an hour, on average.

Due to Indonesia's fragmented infrastructure and income levels, access to healthcare remains uneven. Halodoc hopes to solve the access problem by making consultations and medicine purchases cheaper, more convenient and more efficient.

By the company's own estimate, Halodoc is 70 to 80 per cent cheaper than seeing a physical doctor.

The startup's telemedicine promise has attracted the backing of investors such as Singapore's state investor Temasek, UOB Venture Management, Indonesian conglomerate Astra International and the Bill & Melinda Gates Foundation.

Mr Sudharta said his decision-making now has to take into account a variety of sometimes-conflicting interests, including the ever-present conflict between building a sustainable business and making an impact.

When Halodoc started out, consultations were free and, of course, the startup was making huge waves.

This was not, however, sustainable. Initially, Mr Sudharta said, the free consultations were a way of educating the market. But "if you keep giving free consultations forever, then you definitely don't see a clear pathway to intertwine the market, education and sustainability of the organisation.

"It's very important that we help, but at the right time. That's why clarity of thinking is very important, and understanding where you are as an organisation is also very important."

Early days

Mr Sudharta started his career in 2003 as a sales representative in Mensa Group, the pharmaceutical conglomerate founded by his father Jimmy Sudharta.

In his early years as a rookie pitching sales to doctors, he recalls long waits for popular doctors.

"Unlike in Singapore, (patients) in Indonesia are very skewed to a particular popular doctor. And of course they would be the ones prescribing the most, for our medicine," said Mr Sudharta.

While waiting at doctors' offices, Mr Sudharta got the opportunity to speak to many patients. Several of them, tired of waiting, would ask Mr Sudharta to pass on queries or messages to the doctors so they could head home.

Mr Sudharta later progressed to business development manager and eventually a director at Mensa Group, but his early experiences continued to preoccupy him and he kept searching for ways to make the consultation process less complicated.

Then, in 2013, as Indonesia's digital economy was starting to boom, Mr Sudharta found himself surrounded by friends who were active in tech: Gojek founder Nadiem Makarim, GoTo CEO Andre Soelistyo and Blibli CEO Kusumo Martanto, among them.

"Some were friends of friends. Andre - who is today my commissioner and was the first person who invested in us - I just watched football together with him. I support Chelsea and he supports, unfortunately, Arsenal."

Friendly discussions got him thinking about a digital platform. And in mid-2015 Mr Sudharta pitched the idea to Indonesia's Health Minister, with whom he was already on good terms, thanks to his Mensa Group days.

To his surprise, he was given a go-ahead. "We will build regulation around you, rather than try to stop you," was what Mr Sudharta recalls the minister saying.

That ministerial decision to support Halodoc is particularly fortunate in light of the Covid-19 pandemic.

Halodoc helped with the vaccination of over 50,000 citizens across two islands in the first 23 days of the country's Covid-19 vaccination programme, and helped digitise vaccination registration in over 100 physical facilities such as hospitals and community health clinics.

It also rolled out a drive-through Covid-19 testing service, off the back of some quick WhatsApp exchanges with health officials.

"You cannot underestimate how regulation is going to shape your business. That's why I've always been very close with the Ministry of Health and the agency for drug administration," said Mr Sudharta.

Halodoc's participation in combating Covid-19 has also been a particularly proud moment for its investors.

Seah Kian Wee, CEO of UOB Venture Management, said the pandemic has highlighted the "importance, effectiveness and impact" of telehealth.

"Halodoc has demonstrated that online healthcare with effective offline integration can be a significant contributor in addressing healthcare challenges," said Mr Seah. "UOB Venture Management is pleased to be part of Halodoc's success, which shows that we can do well while doing good."

Sustainability

The pandemic has probably helped boost Halodoc's business too. The company said its revenue last year was 10 times that of 2019. Halodoc takes a cut of transactions that happen on its platform.

Its core revenue streams come from consultations and delivery of medication. But Mr Sudharta said diagnostic services - blood tests and Covid-19 tests - and hospital appointment bookings have been doing well too.

The startup is working with over 20 insurance companies. Out of 20,000 doctors registered on its platform, about 4,000 are considered "very active" - clocking eight to 10 hours a day, around five times a week.

Investors are giving Halodoc more fuel to scale up. To date, the company has raised US$200 million.

But the balance between business sustainability and social impact has gotten more complicated since Halodoc's early days, where it could give free consultations to educate the market.

Mr Sudharta said he counts himself lucky to be supported by investors and partners who believe in the long-term vision: "They believe that while the financial aspect is very important to the sustainability of this company, the financial aspect is a lagging indicator of our success in optimising this healthcare service and simplifying access to care."

At the same time, he is aware of the need to turn a profit and optimise the use of investors' capital.

"I think it's a fair request. This is not a charity organisation," said Mr Sudharta. "We have been steadily growing - or growing very significantly actually - in terms of revenue and sustainability. So, I have not been in a situation where it's quite challenging to answer those questions."

He thinks an initial public offering (IPO) is probably two to three years away. That would make Halodoc one of several Indonesian startups eyeing a public listing as investors warm up their appetite for tech.

Bukalapak raised US$1.5 billion in July, a record IPO for the local bourse. Indonesia's most valuable startup GoTo is also looking to go public.

"Can we do it earlier? Maybe... But I think an IPO has its own challenges," Mr Sudharta said. "We need to be humble and understanding about what is required and what is expected for us to reach there. So I think we just have to keep learning and understanding where we are, and how we can take that opportunity going forward."

• This is the second in a 20-part Green Business series, in collaboration with UOB, exploring sustainability trends across businesses and industries.