Investment Notes: Lumary

With over 4 million individuals living with a disability here in Australia, access and affordability of appropriate levels of care has never been a more pertinent social and economic issue.

In response, the Federal Government introduced the National Disability Insurance Scheme (NDIS) to replace the state-based system with a single, consistent, and national approach to fund support for people living with disabilities. Whilst legislated in 2013, the Scheme only went into full operation in 2020, and during FY20, the NDIS provided $16 billion in participant funding costs. Funding costs are also expected to rise dramatically to over $23 billion p/a over the next 3 years, as additional participants are onboarded. At the end of last year, there were 400 thousand participants using the Scheme, with 200 thousand of those participants receiving support for the first time. It will be years before the Scheme is operating at full capacity, and the number of NDIS providers is expected to grow, in line with the growth in participants and funding.

Lumary is Australia’s leading healthcare platform for providers servicing the disability and aged care sectors. I’m stoked to announce that OneVentures is leading Lumary’s $17m growth funding round, with participation from Salesforce Ventures and the South Australian Venture Capital Fund.

Globally, the broader care industry is also going through a fundamental shift in service delivery, with the COVID-19 pandemic highlighting and accelerating these changes. Some examples of the major trends we are seeing include:

• Transition from volume-based care (i.e. fee-for-service) to value-based care (i.e. incentives based on patient health outcomes). Value-based care is typically defined in terms of cost, quality and patient outcomes.
• Intense scrutiny on cost savings for patients, which may result in a greater push towards value-based care. Within the first 10 days of its term, the Biden administration signed a number of executive orders aimed at strengthening Medicaid and the Affordable Care Act.
• Less siloed care delivery to holistic care management — the lines between clinical and personal care are blurring. Both providers and payors are recognising the crucial role that non-medical factors play in overall patient health (e.g. transportation, food).
• Increasing shift towards home care. In-person visits to clinics fell dramatically during 2020 due to stay-at-home orders as well as individual patient preferences.
• Aging population, increasing levels of chronic illness and hospital acquired complications.
• Rapid digital transformation — healthcare operators are transforming the way they care for and interact with patients remotely outside the clinic. Telehealth is now reimbursable in many jurisdictions and we expect this to continue in some capacity post-pandemic.

In light of the rapid transformation of care delivery globally and the enormous NDIS opportunity here in our backyard, we are incredibly excited to be partnering with Lumary co-founders, Joseph Mercorella and Matthew English, to support health and well-being organisations provide better care using technology.

To date, Lumary has processed more than $2.5 billion in NDIS funding, supporting over 200 thousand users through its platform.

This growth funding will be used to consolidate Lumary’s market-leading position in Australia and expedite overseas expansion, as healthcare providers around the world respond to value-based care directives from governments and changes in funding models.

Lumary’s platform is built on Salesforce and is designed to remove complexity from the operations of running a care organisation, allowing providers to focus on what they do best. Some of the features include automated and compliant claiming and invoicing, contract templates, workforce management (including home care), budgeting and reporting.

We were drawn in particular to the team’s deep understanding of the NDIS and the problems both providers and participants faced.

Prior to founding Lumary, both Matt and Joe had close to 10 years of Salesforce development and implementation in the disability and aged care sectors under their belt. With the advent of the NDIS, and having spent years listening to and solving problems for their disability clients, the pair knew there was a severe need for a fit for purpose, sector specific software solution, and went about building what would ultimately become the Lumary product. Lumary is only in its fourth year of operating and the business has already eclipsed $10 million in ARR, with very little capital invested. The business presents itself with outstanding SaaS metrics and unit economics, growing 100% YoY with very little churn.

We are delighted that Lumary will be the first investment from our newest fund, OneVentures Growth Fund V (read more here), and Grant Chamberlain, OneVentures Partner, will be joining the Board. We are backing Lumary to become the dominant player servicing the disability market here in Australia, and we’ll look to launch them into overseas markets, leveraging OneVentures’ extensive experience building global businesses in B2B SaaS, clinical and digital healthcare.

The pandemic has highlighted the importance of flexibility in the delivery of healthcare, and we believe it has strongly accelerated the popularity of home care options.

Coupled with the increasing adoption of value-based care reimbursement models, and renewed interest in remote care and cloud based digital healthcare solutions, there is enormous potential for software to improve patient outcomes and the efficiency of care providers. We think Lumary is best placed to capture this global opportunity, and we are so excited to partner with them along the way.