HealthifyMe's CEO Tushar Vashisht rules out IPO plans in near term; talks about AI initiatives

Health and fitness firm HealthifyMe had raised $30 million in a pre Series D funding round led by LeapFrog Investments, Khosla Ventures, FinnFund and Van Lanschot Kempen in the first week of June. There were eight investors who participated in the latest funding round and the company is planning to use the capital raised to power its product suite with Generative AI. 

Tushar Vashisht, a former investment banker and a University of Pennsylvania graduate founded HealthifyMe in the year 2012. Vashisht in a freewheeling conversation with Mint spoke about the company's IPO plans, its AI-powered nutritionist Ria, global expansions and his upcoming musical concert. 

Edited excerpts:

All was not well at HealthifyMe in December last year when the firm was laying off people. However, the scenario has changed having managed to secure a $30 million funding. It’s no easy task considering the funding winter across the globe. Tell me about the turnaround.

Layoffs at HealthifyMe were done to build a profitable and sustainable business and it wasn’t because we were in a cash crunch by far. Initially all of 2020 and 2021, we saw such tremendous growth and availability of capital that we were indexing really heavily just like other startups. But post pandemic that wasn’t the case and the world ecosystem was prioritising profitability over growth. We had the funding too not because of cash constraints but there’s a pretty insane opportunity with Generative AI which I think is once in a lifetime and I want to make sure that I capitalise on it. The fact that we are a market leader in India and the fact that we are already being sustainable and profitable combined with this opportunity we are chasing allowed us to build the capital. I wouldn’t say that raising capital was a herculean task in our case. It was in fact relatively easy to convince why we should be the candidates for infusion of extra capital that can disrupt potentially the whole world. 

Tell me about your next course of action. Is it the much anticipated listing or another round of funding for further scaleup? 

We really can’t easily comment on this right now and the public markets are not particularly hot. Eventually we believe they will come back. If we were to look at India business, that’s clearly becoming profitable and IPO-able. But there’s a pretty fantastic opportunity we are chasing right now which could be world changing. If this gives its fruits we will probably continue as a private capital entity for a long time. But if we’re just doubling down on our India business then it will be for a lesser period of time. I don’t think an IPO in the next couple of years is in charts.

Also read: Tushar Vashisht of HealthifyMe is out to change how you eat

HealthifyMe was founded in the year 2012 and the product has been here for a decade now. We understand that there have been expansions lately. Tell me about the response here in India and abroad. 

The whole world has become tremendously overweight. In the last 25 odd years we have got nearly 3 billion people overweight and nearly 250 million people malnourished. Fundamentally, the problems of humanity and health care will come down to lifestyle diseases — metabolism disorders, hypertension, diabetes and so on. And these are reversible and controllable with lifestyle modifications. There’s a need for products and services like HealthifyMe and there aren’t many companies servicing this outside the United States and China. There’s a need that’s quite huge in LATAM, Middle East and Southeast Asia. SEA has been a great experiment for us and we have been utilised well during the pre-generative AI world. It took around nine months for us to train our AI product for the region and with Generative AI we can be much faster and take our AI powered nutritionist Ria to the next level. 

You have mentioned Generative AI multiple times but how is it going to change your customers’ lives upon its integration with HealthifyMe. 

Ria was the world’s first AI coach and nutritionist. We launched it in 2018 in a pre-generative AI world. We were using various LSTMs (Long-Short Term Memory networks) to make it work like an AI bot and it was outperforming. Obviously Ria now looks outdated given the new capabilities coming in with transformers and we’re working on this. The proof of our concept is that half of our subscribers only deal with Ria and they don’t subscribe to our human coach plan. This has been a synergistic play for us and quite a game changer. HealthifyMe increased its gross margins from 26% in 2016 to 72% in 2020 and this is solely because of AI. 

There are privacy concerns particularly in a sector like health. How is HealthifyMe dealing with this?

We are one of the first companies in India to adopt GDPR (General Data Protection Regulation) compliance. Privacy in summary is giving customers full control over their data and if you’re able to do this you have reached the gold standard in privacy. We leave it to our customers when it comes to deletion or sharing of data. We always ensure that we don’t share our data to a third party for any individual use. 

Is HealthifyMe looking at being just beyond a fitness app? Maybe eventually venture into the world of medicine technology or even some kind of offline presence similar to your competitors.

I think it is important to keep focus and stay true to our DNA. We digitally help to eat better, sleep better, reduce stress and work out more. We are now strongly focusing on building our AI capabilities to scale up globally. But for our India business to have more resilience, it makes sense to have some offline partnerships. We find a couple of areas exciting — disease reversal and the food space. We are running a limited scale experiment with the HealthifyMe store where we plan to sell health gadgets to protein supplements and we intend to launch it this quarter.

On a lighter note Tushar, it would be no wonder if you would have started a Spotify of sorts instead of a HealthifyMe. I say this after listening to your soulful song — Kahaani. I understand that you’re as passionate about music as much as you’re as an entrepreneur. Tell me about your coming gigs.

I have got five odd originals right now available on Spotify and YouTube. My wife Neha has been pushing me to do a concert in September this year. I love mixing sounds and I have got a bunch of covers with my additions of Indian classical and fusion. I still haven’t started rehearsal though. I really hope I find time to do it.