Skip to main content

Christine Noonan, a yoga instructor and an early adopter of League, works with founder Michael Serbinis in his kitchen in Toronto on November 14, 2015.For the Globe and Mail

One of Toronto's most successful entrepreneurs has kindled his latest fast-growing startup by tackling two irritating problems of working life: how to find good-quality non-medical health and wellness professionals and how to claim those expenses on your benefits plan in a simple way.

League is the latest startup from Mike Serbinis, who in the past 20 years has co-founded and sold two multihundred-million-dollar businesses: DocSpace (a document security company) and the e-book reader company Kobo.

Initially, he saw League as an Uber-like network of paramedical and wellness services – everything from chiropractors to nutritionists, optometrists to yoga instructors – where interested users could sign up, find a local provider, book appointments, pay for services and rate the experience in one simple app.

His new company has only 20 employees, but five months after starting operations in Toronto, he has expanded to Seattle.

The secret sauce for rapid adoption: letting small- and medium-sized businesses offer League as an à la carte buffet of extended benefits to employees in lieu of a complicated or pricey package from a traditional insurer. After the company started offering the app to employers in its  third month, "One employer became 10, and 10 became 50, and now what we have is a pretty substantial pipeline of employers that are in the funnel," Mr. Serbinis says.

The launch in Seattle has gone even faster. The company targeted employers first, which also helped attract the service providers.

League has had to turn down at least one potentially massive client, a retailer with 25,000 employees, because the service offering isn't broad enough or in enough cities yet.

In the new year, Mr. Serbinis plans to add more cities in the U.S. and Canada, and to raise more capital to fund that expansion (so far he's working off a $4-million angel-funding round).

According to the 2015 fact sheet from Canadian Life and Health Insurance Association Inc., there are 24 million Canadians with extended health-care coverage and 15.6 million with dental care plans. Insurers collect about $38.8-billion in premiums for health benefit plans. A big chunk of that revenue, about $10-billion in 2013, relates to prescription drug coverage and wellness initiatives make up a relatively small portion. But what employees want in terms of benefits is facing some generational change.

"It's a space that employees perennially are frustrated with," Mr. Serbinis said. "Filling out paperwork is just not what people expect to do these days and certainly among certain demographics, definitely the millennial demographic, there's zero appetite to do that. [League] is much easier for the employee, there's no forms to fill out, it's just in your digital wallet, much like your Starbucks app."

The other shift has been toward coverage flexibility and options.

"The trend nowadays is all companies are realizing the one-size-fits-all packages aren't working any more," said Lisa Kay,who runs Peak Performance, a human resources consultancy.

One of her clients is a traditional manufacturing company that offers few of the work-life balance trappings such as free food, yoga classes or flex time. "They have an engineering department that needs to compete and they are looking for young enthusiastic talent, but they are old school. I tell them: 'Even if you get them through the door, they are not going to stay here once they realize they can get a better package somewhere else.'"

Part of her business is to help custom-build solutions for each employer. League is pitching a system that lets employees do it themselves from a large pool of local providers.

And there's a case to be made that fostering employee wellness through preventative care can rebound to a company's bottom line.

A Harvard Business Review report from 2010 said Johnson & Johnson saved $250-million (U.S.) from 2002 to 2008 by investing in a wellness program aimed at "employees' social, mental and physical health." The claimed return was $2.71 for every dollar it spent. That said, Johnson & Johnson was going after programs that reduced smoking and tracked blood pressure as part of an overall health spend in the more typical U.S. employer insurance model.

For providers, the enticement is obvious; this is a fragmented marketplace and access to big new pools of potential customers can reap rewards.

"I made a lot of money with League," says yoga instructor Christine Noonan who has been on the network for only a few months. About a month ago, she taught a class at the Mars Innovation Centre on behalf of League and was deluged by new clients. "I'm not sure what the retention on that business can be; I've been so busy with seeing clients."

League has more than a thousand other providers in Toronto, each of whom pays a 2.5-per-cent transaction fee on each service, plus a monthly subscription fee starting at $30. Companies pay League a management fee starting at 5 per cent.

Mr. Serbinis says the company will also offer gift certificates – a block of League dollars that can be used for any service – in the next few weeks. "The holiday season, the kickoff for the new year, is the biggest time that health and wellness dollars get spent."

Mr. Serbinis says the company has not evolved to a point that it has become an insurer. "I did have an insurer in here the other day that said: 'Wait a second, so you're getting providers in cities across the country, and you're getting employers to sign up and you're getting them to pay. Sounds like an insurance company to me.'" Not that Mr. Serbinis has any plans for that at this stage. "What I more likely see is a model where League can be a digital brand for insurers. You know, a similar model is what Tangerine now is for Scotiabank. More partners with insurers, than actually becoming an insurer."

Report an editorial error

Report a technical issue

Editorial code of conduct

Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 27/03/24 6:40pm EDT.

SymbolName% changeLast
JNJ-N
Johnson & Johnson
+1.41%157.96
SBUX-Q
Starbucks Corp
+1.26%91.5

Follow related authors and topics

Authors and topics you follow will be added to your personal news feed in Following.

Interact with The Globe