“January and February were cash flow positive,” company co-founder and CEO Tushar Vashisht said, adding that he wanted to ensure that Healthify’s India business remained profitable. It took the company nearly 13 years to reach this point, having been founded in 2012.
The company’s plan for 2025 is laid out: “Scaling a small but growing US business, handling a profitable India business, and driving AI innovation,” he said.
Maintaining a profitable India business
Healthify’s immediate plans for the India business are to consolidate what’s working and bump up profitability.
Some of it can be attributed to the company’s restructuring exercise in April 2024. According to a report from Inc42, around 150 employees, or 27% of the company’s workforce, were impacted. It was the third restructuring the company had undertaken in two years.
“The restructuring was really helpful because we were able to streamline our India business operation significantly, resulting in our first cash-flow positive month in January and what looks to be our first cash-flow positive quarter,” Vashisht said.
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The company’s revenue mainly comes from the consumer segment in India, but it’s also seeing its B2B business take off. Revenue from the B2B segment, which was started a year and a half ago, is currently between ₹1-2 crore per month. “I expect it to be an independent and isolated ₹100 crore business in the next two years,” he said.
Healthify is seeing two broad trends playing out in the B2B segment: corporate wellness initiatives and what the company calls “partnerships.”
Rise in business
Interest from corporates is due to the company putting its app behind a ‘freemium’ paywall, i.e., providing basic features for free but charging for additional features. “Since then, not only has business skyrocketed, but we’re getting a lot of inquiries from companies,” he said.
Healthify wants to continue partnering with large companies for their corporate wellness initiatives. Later this month, the company will launch a programme for Amazon and Titan.
On the partnerships side, the company is in talks with other entities in the health tech, fit tech, insurance and diagnostics industries to provide the Healthify app to their customers at a nominal fee or for free. Vashisht declined to share too many details since the programs aren’t live yet but said he hopes to make announcements in the “coming weeks.”
The company doesn’t have a 1:1 competitor in India, but similar startups in the space include Cure.fit, a wellness and fitness company founded by Mukesh Bansal and Ankit Nagori that runs the Cult.fit gyms; Fitterfly, a startup that helps people manage their diabetes and lose weight; and Fitelo, an app that provides disease and weight management services to users.
Growing in US
Healthify soft launched in the US late in December with its calorie-counting tool Snap. In February, it initiated its human-coaching lab, which included hiring local nutritionists, dieticians, and trainers.
Since the December launch, the company says it has added thousands of users, with some of its initial cohort of customers having just hit their weight-loss goals.
“One should have cognisance of the strong competitive landscape in the US. It is going to be a challenge. But, at the same time, it also throws up numerous opportunities because the market there is growing,” said Dr Ratnakar Palakodeti, president – healthcare, medtech and life sciences at Innominds, a US-based digital product engineering services company.
Several established companies in the US already provide roughly the same services as Healthify, such as Virta Health, Omada Health, Teladoc Health, MyFitnessPal, and Noom.
But Vashisht isn’t worried.
“What’s not there in the US market is a disruptive AI play. There is a massive opportunity to take our AI-enabled coaching solution and AI-enabled nutrition tracking solution to really make a difference in the market,” he said.
The company has a two-part plan for its US strategy. Phase one is about ensuring that it is successful with the consumer segment to produce evidence-based results for customers in the US, resulting in a growing user base.
“Despite having established players like MyFitnessPal and Noom, Healthify’s real-time personalized AI coaching at an affordable price and its fitness and nutrition guidance would be a key differentiator from some of the other established players in the US,” said Dr Nita Sachan, venture partner at Silverneedle Ventures. This VC firm invests in deep tech, sustainability and emerging technologies. “Operating in a cost-conscious market like India has instilled a focus on affordability, which can be leveraged to offer competitive pricing in US markets.”
Phase two involves entering the enterprise space, which Healthify is slated to do later this year.
“Within six months in the US, I hope to have a multi-million run rate business, one which will also be showing signs of success in B2B areas,” the former investment banker said.
Deeper AI push
Healthify’s existing AI assistant, Ria, will become multimodal, capable of understanding and responding to voice and images. Earlier, the assistant could only interact with app users through text. The goal for the company was to make Ria more conversational and tuned to specific users. The updated version of the health assistant is slated to be launched for all users in the coming weeks.
“Overall, this should result in a higher quality product, higher engagement, higher leverage, higher client-to-coach ratio, more efficiency, better margins,” Vashisht said.
The company has been using reinforcement fine-tuning to make its AI offerings more efficient. Also known as RFT, it allows developers to use “expert models” for a narrow set of tasks in their domain. In Healthify’s case, that’s health and wellness.
The company is essentially ‘distilling’ from a large language model (LLM) to a small language model (SLM). Currently, the company uses a combination of OpenAI and Anthropic’s LLMs.
The company has now put up subscription paywalls for access to its AI services, and to their surprise, people are willing to pay. “It’s given us a lot of lift. It’s another reason why we went profitable. Our AI subscriptions have pretty much doubled overnight,” Vashisht said.
Healthify’s earlier AI subscription used to cost ₹4,000 per year. However, as the company’s investments in AI have increased, especially with their distillation of LLMs to SLMs, costs have decreased.
“Our baseline AI subscription, Healthify+, costs ₹1,500 a year,” said Vashisht, adding that the low cost was the reason they’re seeing a “couple of crores a month” in revenue from their AI subscriptions. “It’s changed the game for us because that product operates at around an 80% plus gross margin,” he added.
Healthify’s other plans include HealthifySmart for ₹4,199 per year and HealthifyPro for ₹4,400 per month.
The company was founded in 2012 by Tushar Vashisht, Matthew Cherian, and Sachin Shenoy. It initially raised $250,000 in funding from angel investors before Micromax Informatics’ undisclosed seed round. In 2016, Blume Ventures led Healthify’s Series A round, along with Chiratae Ventures, Athera, and Inventus Capital Partners.
In its Series C round in 2021, the company raised $75 million, with US-based Khosla Ventures leading the investment. In 2023, it raised $5 million in venture debt. Its latest fundraising round was in October, with Khosla Ventures again leading the round alongside LeapFrog Investments with healthcare billionaire Ranjan Pai’s family office, Claypond Capital, joining in.
