Lukas Saari, Co-Founder & CEO of Tandem Health: BREAKING: Tandem Health raised $100M Series B

0:00Lukas Saari:Hello and welcome back to the Scaling Europe show. Today we have got a repeat guest, Lukas, for his second appearance on the podcast. He's very excited. We're caught up in the end of last year. Now you're back with some very exciting news. Lukas, take it away. What's going on? What are you announcing today? So today we are very excitingly announcing our 100 million Series B that is being led by the ScaleUp Europe Fund that's managed by EQT to now really enable us to take the next step to take care of European healthcare and bring it into the AI era. Let's go. Absolutely amazing. You've become, you know, you're part of this generation of phenomenal companies coming out of Stockholm.

0:37Lukas Saari:All of you have grown like crazy and this is like an amazing validation for you on your journey. tell us a bit about the round you know where did it come from how did the scale of fund get involved what unlocked it yeah i mean so for me capital has always been a means to go faster and accelerate further um so what we've felt now during the past couple of months was that we've started hitting the milestones we wanted to hit in terms of now having expanded to be in 14 different countries across europe having laid like the local foundation with the teams in place having the like those logos in place.

1:10And now it's just like, how can we scale that go to market engine faster? And also on the product side with having now grown from an initial AI medical scribe that is on in the background, like a meeting note taker when the doctor meets the patient, transcribes, generates a draft medical notes, and now having built out towards what is rather a complete AI medical assistant that also summarizes the patient's history before the visit, does clinical decision support in real time during the visit, and after the visit, not just as the note, but also does the referral, does the coding, does the prescription and so on.

1:40So also seeing here that on the product side, it's now time to take further the next step towards rather building what is an AI native operating system of a clinic. So how do we also handle like the incoming patients with having an AI receptionist that receives the phone calls for triaging scheduling? And how do you also support a clinic with other tasks as we're now bringing European healthcare into the AI era?

2:03Lukas Saari:Amazing. So there's two things there. go to market you want to accelerate and then product this product roadmap we can talk about both of those on the go to market side you have ramped up you're working with and you tell me like so many clinicians especially in the uk it's so widely used what is the go to market motion and what does that process look like when you're essentially trying to getting into clinicians which is probably not your typical software buyer ai tool procurer right yeah i mean so we're proud to now be serving more than 10 ,000 care organizations. So having quite the footprint now, the UK is one of our biggest markets also.

2:38And our focus is really on the enterprise segment. So how can we be the AI partner of choice of the biggest healthcare providers across Europe? And seeing that it's the bigger enterprises where we can have like a CIO counterparty, we can have regular workshops, and we can grow with them from being this like scribe to medical assistance to operating system and bring them along on this journey. And I think here's something that's super interesting in terms of the value that we bring. I like to talk about like the quadruple helix of value that we're bringing. So when you talk about improvements in healthcare, you're talking about improving quality of care, quantity of care, work environment for clinicians and patient experiences.

3:20And historically, there's pretty much always been a trade-off of this. So it would be that, okay, you need to start documenting this new thing because that improves the quality of care because you can follow up on it more. But that adds to the documentation burden and so on. But now with technology, you can actually improve across all four of these access in parallel. And this just makes it so transformational, both for the clinicians, but also for the decision makers. And then that's sort of spurring this type of technology being adopted now at a precedented scale and pace for healthcare.

3:52Lukas Saari:Can you touch on the adoption? How receptive are clinicians, the real end users to using tools like yours? Yeah. I mean, so clinicians are historically not the most change prone profession, you could say. I mean, this also comes from them really having felt that they've been abused by IT systems historically. I mean, so if you're familiar with it, you know how clinicians are spending 40 % of their time on admin and their sitting in these systems that were built in the 80s and 90s and still look the parts. And commonly it's been coming like top down from the decision maker and saying like, now we need to start using this tool also because then we can have less medical secretaries and we can save some money and so on.

4:34But really it's just like adding to the burden and another system, another thing to click through and so on. But what's so revolutionary now is, okay, if you ask a clinician, what is it that you hate most about your work? It is, I'm right now sitting two hours every evening after I come home and doing documentation instead of spending time with my family. So if you go to a clinician and you say, now we have a solution that solves this for you, the clinicians are very happy to accept it and then start using it. So for us, we're actually commonly seeing that it's rather almost more of like a bottom up motion with the end users, the clinicians being the one that really are pushing for the solution.

5:11And then it's rather a question of how fast can you get it through the organization with the procurement, the legal, the compliance aspects and so on.

5:17Lukas Saari:But it must be amazing to have almost like internal advocates fighting for your product, or at least this type of change. You mentioned kind of product roadmap and you're moving from, I guess, on this journey from being like a scribe tool, which is your initial product, your initial kind of wedge, to now this sort of like AI native operating system for clinicians. How are you deciding what to build next for the clinicians that you're serving? I mean, so we're working very closely with our customers and like having these regular check-ins and workshops with the CIOs and so on to understand like what are the additional challenges and issues that you are seeing.

5:56And then from our side, also seeing what is it that we can develop that we can apply across Europe, like across care settings, providers and so on. So if you think at the core of it from like a patient journey perspective of how does it look today and how is it starting to look now when you use tandem instead. So if you as a patient are feeling sick and you're calling into your clinic, you would today be calling in between eight and nine in the morning when there's a phone slot available. You sit in a phone queue for half an hour and then you get told, sorry, we're fully booked today. Please try calling again tomorrow and call a bit earlier because then it might not be fully booked yet.

6:31So like not a great experience for you as a patient and also very time consuming for the clinic. How can you instead have what is rather like an AI receptionist that responds to the phone call, can do triaging, can do scheduling, handle simpler tasks as with prescription renewals and so on and be available 24-7? And then when you come into the clinic, how can you instead of having the clinician sitting and reading through Lucas's past 50 medical notes to figure out who is Lucas, why is he here today, what should I do with him? instead just have an LLM summarize that for you and then during the visit if you as a clinician are unsure about something instead of using google or sitting with control f in various pdfs and so on can you just have like an ai with you in the room that's listening and has access to the patient context the right guidelines and then after the visit instead of manually doing the note-taking by hand the coding by hand the referral by hand the prescription by hand the follow-up appointment booking by hand and so on having this like complete ai medical assistant that takes care of all of

7:26Lukas Saari:this for you so yeah i was gonna say are you betting on a you know along that stack from you know the phone call to the post night post notes write up whatever are you betting on specific areas right now there are areas of focus that you really think is going to unlock the next kind of area for you yeah so all of the things that i described now we have live at various stages um so i mean a year ago we were more in the scribe space expanded to this like a medical assistant and now doing more of also the patient facing and patient flow aspects that we're bringing across. And then how I'm thinking about it with this like grander AI native operating system is really breaking down and thinking more first principle, like what are the 20 categories of tasks that you need to do at a clinic?

8:11And I listed a bunch of those in the use cases that I just described, but there's also many others. And then saying, how can we go to a clinic and say, what we now want to do is to help you to automatically handle all of these 20 different types of tasks. And we can either support these at a level zero, which is we don't do it at all. A level one, that is that we provide a draft to the clinician and they act on it manually. Level two, we provide a draft to clinician and they can press yes and then it's automatically handled. Or level three, you can just do it without the clinician being in the loop.

8:44And now wanting to see, okay, how can we go to clinics and then say what we want to do with you over the coming few months is that we want to bring all of these types of tasks that you're doing up to like level two, level three, and then using that as a type of framework for how do you bring a clinic into the AI era and sort of make them more and more agentic and automatic.

9:04Lukas Saari:When you're working with these clinicians for the first time, is Tandem Health their first experience using tools like this or are they working with other people beforehand? Are they looking at lots of providers? What's it like trying to get them on board? So we're commonly the first AI solution that they have come in contact with and are procuring. But then it depends a lot also per market. And I think this is also one of the very interesting parts of Europe that some markets such as the UK are more mature and also much more competitive. So everyone knows that this is a thing and it's more of a competitive process and seeing should they select our solution or another solution rather than should we select a solution.

9:43And then when we go to some other countries, it's much earlier in the maturity. So then it's more about like creating the awareness, convincing this is a positive ROI in business case and so on. But then there's also less competition as a virtue of that.

9:56Lukas Saari:Are you doing a lot of the sales yourself still? I mean, I try to be involved in some of the most important sales processes that we have, also quite a lot of different partnerships and so on. And so seeing how I still want to be close to the business in it but then still seeing like where can i be active where i get the most leverage on my time and how else has your job changed i mean you've been through this transformational journey how many employees do you have now so we're now about 230 or so the company's what three years old yeah we turned three years now just recently so i mean three years ago we were three co-founders sitting in my apartment and living room and then two years ago 10 people, one year ago, 60 people, and now 230 people and being in 14 different countries across Europe.

10:43And I think like for me as a person, my core drive is very much feeling that I get to learn, that I get to develop, do novel things. And for this journey, I'm getting that on like steroids. And every few months, we jump through like a new phase of the company that then brings like novel types of challenges and novel types of learnings. And I just get so much energy and excitement from this.

11:05Lukas Saari:And what are you focusing on now that maybe you weren't focusing on two years ago? Is it more about hiring and fundraising where it used to be more about sales and product? Like how has your world changed? Yeah. So here also I have two co-founders, Oliver that's a CTO, so he leads the product and tech, and then Oscar that's chief commercial officer, so he leads the sort of go-to-market side. And then I lead the central functions, but I'm also involved in like the highest prior initiatives across as a bit of a bridge there. And I think for me now, I really strive to see what are the most important initiatives that we are driving as a company right now.

11:41And how can I like involve myself and apply the like founder pressure and founder mentality to drive those as quickly as possible and make those a success? And how can I use sort of the just history and experience that I have now with the company within this field to be able to know okay like how do we navigate this how do we unblock it as quickly as possible and then try to do this like across the most important commercial deals but also in like the most important product

12:07Lukas Saari:releases and so on and where are your team based at the moment do you have local teams in each of the markets that you're operating in now yeah so we have our headquarters in stockholm and we centralize basically everything we can to stockholm but then we localize go to markets because we realize that healthcare is a local game and we can't really sell to a german hospital out of Sweden without speaking German, like you need to be there in person and visit the clinicians and onboard them and so on. So we've expanded and now have like in London where you're sitting, we're roughly 30 people in the Netherlands, we're 25 in Germany and France, we're 15 each, we have people in like Italy and Spain and all of the other Nordic countries in the Baltics, in Portugal and so on.

12:47So now I'm starting to have this foundation in place across really the key geos across Europe. And now it's about how do we scale this as quickly as possible.

12:56Lukas Saari:And, you know, you're betting very big on Europe. Europe is where you want to focus. It's also interesting, one of the most European cap tables I think I've seen. Was that intentional? Were you like, you know, I understand that. Yeah. Tell me a bit about the focus on Europe. Yeah. I mean, we've been very intentional about focusing on Europe and also structuring your cap table along those lines as a result of it. And for me, firstly, I just believe that European clinicians also deserve access to the best tools and tools that are built here and not built in the US and then retrofitted for European setting, but don't really work as well.

13:33And then also if we're looking at our space, I very much believe that Europe is more lucrative than the US. And it's firstly due to the competition in the US, like US is more mature, it's more of a red ocean and so on. So it's very different environment there. But secondly, when you're looking at the fragmentation and here we choose to view the complexities and the fragmentation of Europe as a strength and a moat rather than something that we try to shy away from. And the fact that it's so fragmented, I mean, it means when you get started that it's more difficult because there's so many different systems to integrate with and so on.

14:09But it also means that in the US, you have two systems, Epic and Cerner, on the medical record system side that dominate and have 70 % of the markets. So you become incredibly dependent on these. And they have thousands of engineers, they have their own AI agendas, and they have a lot of power for potentially locking you out. Europe, even the top 15 medical record system vendors comprise of less than 70 % of the market. And these vendors are typically these like Frankenstein's monsters after acquisition journeys over the years that have dozens of systems beneath them. So that means that in Europe, the system landscape is so small, essentially, that they are like subscale for developing these types of functionalities in-house, and then are rather wanted to partner with someone like us for how they can bring this to their customers quicker.

14:54So this also means that we have a much better environment on just incumbent the system landscape side for the mid to long term.

15:02Lukas Saari:Are there American companies who are trying to expand into Europe and compete with you? So I've been surprised by the fact that there's literally no none of our US competitors have even tried to go into Europe. There is one company called that is like a sort of DecaCorn type of company now that does like chat GPT clinical decision support for clinicians. They expanded into Europe, but actually completely shuts down their operations in Europe a few months ago. So like if you go onto their website in Europe, you just get a like not available in Europe due to regulations type of page. So this being because they didn't adhere to the like regulations and certifications required in Europe.

15:44Lukas Saari:That's so interesting. So you really, yeah, it's, And when you look at some of the most successful companies that have come out of Europe, it's actually a lot of the time it's companies that have been able to use fragmentation as that moat, whether it's Revolut and cross-border currency or WISE or even like 11 Labs with all the language stuff. It's like the inherent traits to Europe can often breed real amazing innovation. Yeah, and I think especially now with AI, it breaks down borders a lot. So, I mean, large language models are magical, so it works across languages, right? Because you can now write code much quicker, it's also easier to handle the fragmentation and do a lot of integrations and so on.

16:24So like many of the challenges that you had before are not as significant anymore, which also makes the case much more credible for like a European play now. And I mean, if you look in healthcare historically, there's almost zero success examples of companies in the health tech domain that have managed to scale across multiple countries in Europe. so also very proud and excited to be able to show that this is something that is possible also in europe and hopefully be an inspiration for other european founders that you don't necessarily need to go directly to the u.s there is also viability in going for other markets amazing

17:00Lukas Saari:and talk to me a bit about raising from the eu scale up you know it's very new they're making a lot of investments well they've announced a lot recently with the exploration company mistral lovable uh ici you know they're investing some amazing companies they seem to be moving quickly which is great what was what's been your personal experience kind of working with the team at eqt yeah super positive and i mean given that i'm from stockholm also i've been in contact with the eqt team for a longer period of time and for me the scale up europe fund which is the perfect match for what we're building and like the narrative and the brands that we're going for where they have like this perfect type of access and knowledge across Europe.

17:44So for me, they were, I mean, the number one choice in terms of who is it that I want to partner with. So very happy that this is where we ended up.

17:52Lukas Saari:That's amazing. Look, you've now got this sort of cash chest, war chest, 100 million to deploy. Where are you going to be investing that? Are you thinking about go to market in the markets that you're already existing in? Are you going to be expanding into new European markets? Is it going to be product development? how does that look like over the next 12 to 18 months yeah so a lot into the go-to-market side in the various countries and just like accelerating and adding fuel to the fire to both the team size but also the marketing activities and so on that we're doing across the years and then on the product side where i now feel very high clarity in terms of where we want to go and what we want to build and it's like zero research risk so to stay it's just like an execution risk and how quickly can we get there so now also sort of standing up additional product teams and so on for developing additional of the key features that we want to do now in parallel amazing and you know sweden continues to have this incredible moment you know last year was phenomenal this year continues to be phenomenal i'm going to be in stockholm next week actually what is it like is is there still this feeling of excitement and momentum in stockholm there's definitely lots of excitement going on in Stockholm still.

19:02And I think to me here, I see that Sweden is this almost like go deluxe type of size country where it's sufficiently large to have enough like talent and aspiration and so on within it. But it's also sufficiently small that no one is building with just a Swedish ambition. You're building with a global ambition from day one. And I think if you were to start in another country, say like France, then that market is so big that you will likely be staying in your home market for a longer period of time. And then when you're going to expand, it's only the US that makes sense because all other markets are like the same size or smaller almost.

19:40So I think here by virtue of us being from Sweden, we were building with an international ambition from day one. When we started going internationally, we didn't just go to one new country. We hired three country directors in parallel. So we really built this into the company DNA and processes from day one.

19:56Lukas Saari:And I think that's so true for the UK as well. We had so many amazing fintech unicorns that were built and scaled at the same time as Revolut. But the vast majority of them just stayed laser focused on the UK market. Well, Revolut had that mentality and have seen incredible success. You're often bucketed into this cohort of companies, which is like SANA, Lovable, Ligora, or this generation of sort of AI native companies coming out of the city and the country. Is that a fair cohort? Do you see also, you know, from the outside the rest of Europe, you look like a tight group of phenomenal founders.

20:30Lukas Saari:Does that, you know, do you see each other frequently? Is there a sense of real community among Swedish founders? Is that a real thing? Or is that just a bit of romanticization from the rest of Europe? Yeah, I mean, it's definitely a small ecosystem. I had been there with the founders of two of those three companies earlier this week. so I mean we're definitely close to each other we connect regularly I'm super inspired by those journeys as well and I think that for me as a founder the other companies that I draw the most inspiration from are those that are like building in the same cohort or maybe are like one year ahead and so on they're taking like Ligora that are building essentially the same company that we are doing but they're doing it in another vertical in legal instead of healthcare and so on so I think it's incredibly valuable to just have these like sparring partners so closely available yeah amazing must be must be such a powerful thing to have well look lucas a huge congratulations to you and the team on this amazing round i love to see a european company in europe for europe backed by europe couldn't be happy for you and the team yeah let's go europe thanks thank you very much