Mike Serbinis has never lacked support from top Canadian investors in his eight-year effort to build League, Inc. into a digital health care giant despite strategic shifts along the way. Now after finally landing on what seems to be the right formula, the serial entrepreneur has raised US$95-million led by Australia’s TDM Growth Partners and the venture capital arm of California’s Workday, Inc.
With the financing, his latest startup is now valued at US$945-million and is the first part of a broader fundraising effort that could top US$200-million. It follows a string of signed but mostly unannounced deals that should establish the Toronto company as a leading provider of “platform” software to large consumer-facing organizations such as pharmacies and insurers to seamlessly offer a range of health care services in one place to their customers.
“It’s become clear to us that health care needs a Shopify or Google Cloud-type infrastructure player that others can build on” to offer health care services, Mr. Serbinis said in an interview.
League is poised for a big year. It now has about US$35-million in annual revenue and more than one million users of its software. By the end of the year, the company expects revenue to reach US$100-million and have more than 10 million users, Mr. Serbinis said. adding: “Our focus is on getting to north of 100 million users this decade.”
League started in 2014, two years after Mr. Serbinis sold his e-reader maker Kobo Inc., for US$315-million; he had previously sold his internet-based document-sharing startup DocSpace Co. Ltd., to U.S.-based Critical Path Inc. in 2000 for more than US$500-million, near the peak of dot-com mania.
Mr. Serbinis’s initial goal with League was to build an online platform that would connect consumers with thousands of health professionals – effectively “Uber-izing” health care. But after determining the economics didn’t work, the company abandoned the business model within two years.
Next, League built a platform for employers to offer millennial-aged workers “lifestyle and health care spending accounts.” The idea was to give workers more flexibility in how they spent their benefits, including on non-traditional services such as personal trainers, yoga classes and art therapy. That helped League attract customers including Shopify SHOP-T, Facebook, Uniliver Canada Inc. and Workday WDAY-Q.
League more than doubled revenues every year, averaging 217-per-cent annual growth since inception and attracted financing from Manulife Financial Corp. MFC-T, Power Corp. of Canada POW-T, Telus Corp. T-T, Royal Bank of Canada RY-T, Canada’s billionaire Weston family, plus OMERS Ventures, Real Ventures, BDC Capital and BlackBerry Ltd. co-founder Mike Lazaridis.
Real Ventures managing partner Janet Bannister said her firm invested early on despite knowing that building marketplaces was “extremely difficult.” Their rationale at the time: “We’re backing Mike, not this idea, and if this idea doesn’t work out Mike and his team will pivot and figure something out,” she said.
Even as its benefits offering gained traction, the company wasn’t finished pivoting. Mr. Serbinis said his company figured that to reach the largest number of consumers “you inevitably find you can reach them through their pharmacy, their health care provider or hospital system, their insurance company or their employer.” When he spoke to a cross-section of those players, he found they all felt the online experience of accessing health care lagged other industries. “We thought we could be the underpinning for all this,” he said, describing it as a “Eureka moment.”
The first offering was unveiled in October, 2020, when Shoppers Drug Mart parent Loblaw Cos. Ltd. L-T (controlled by the Westons) launched a mobile app called PC Health. The app delivered digital health care services to its customers ranging from chatting live with registered nurses to ordering health and wellness items. It ran on League’s platform and enabled Loblaw to plug in a variety of other health care apps so customers didn’t have to switch between providers once entering the platform.
That was followed last June by a deal with U.S. health insurance giant Humana Inc. HUM-N Caleb Gallifant, Humana’s vice-president of product and strategy, said League “allowed us to bring what is a fragmented member experience into a seamless and singular interface.” Mr Serbinis said League has since signed four other deals with undisclosed partners.
Jess Bell-Allen, an investment manager with TDM Growth Partners - which previously backed Slack, Square and Twilio - said in an interview that despite the fact League is still in the early days of signing platform clients, “we had an incredibly high degree of confidence” the deals it is negotiating will be a “sufficiently large driver of great revenues going forward to deliver the returns we’d want to see.”
Editor’s note: TDM Growth Partners' name has been corrected in the online version of this story.
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