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Why We Invested In Bento

Month: October 2021

Why We Invested In Bento

Posted on by erin

Dental insurance might be a lot cheaper than health insurance and give people a lot less grief, but underneath the surface is an antiquated industry that is wildly inefficient. That’s why we have chosen to invest in Bento, a self-insurance, digital marketplace that connects patients, payers, and dentists in one network.

Bento is looking to disrupt the age-old $16 billion dental insurance market by leveraging technology to remove the middlemen — the legacy dental insurance companies. The company is also catering to the tens of millions of people that don’t have dental insurance.

Luckily, this herculean effort is being led by Ram Sudireddy, a visionary CEO with loads of experience building great companies and disrupting large markets. Here is why we believe Ram and his team at Bento have found a huge gap in a massive market.

The Pain Point In Dental
While we are not here to argue that dental insurance is a bigger headache in people’s lives than health insurance, there is no denying that health insurance is actually a much better deal — and exponentially so.

Yes, the average individual pays $6,000 annually in health insurance premiums, compared to just $500 annually for dental, but health insurance covers millions of dollars in potential treatment should you ever have a serious medical condition such as cancer. Conversely, dental insurance normally only covers up to $1,500, and you probably have to spend thousands in premiums over multiple years even to qualify.

Additionally, once you get a little older and start making a few trips to the doctor, you quickly realize just how expensive everything can get and how important it is to have health insurance.

Dental insurance, on the other hand, is barely used. 97% of dental insurance customers do not reach their annual coverage maximum, leaving employers and plan sponsors wasting tens or hundreds of thousands of dollars each year. Up to 80 million Americans are uninsured or underinsured on the dental front.

All of this brings us back to the conclusion that while dental insurance seems like a good deal, it’s actually not very practical.

That leads us back to our recent investment in Bento, which we believe is challenging standard conventional offerings from legacy dental insurers that have for too long failed to innovate. It does this in several ways:

  • Associations and Employers can design custom coverage plans for their members and employees without the constraints of insurance plans
  • Associations can offer their uninsured members discounted dental coverage
  • Employers can offer their employees total control over how to use the dental benefits provided by their company
  • Employers only pay when dental services are used, and and avoid paying for unused benefits
  • Dentists can offer Office Plans directly to uninsured patients through a Shopify-like experience
  • Individuals and families can use Bento-for-life between jobs and post-retirement to benefit from discounted service rates

Bento brings it all together with a sleek digital platform that includes a portal for consumers to select and purchase plans; a member app that allows individuals to manage their coverage and appointments; and a portal for dentists to manage appointments, payments and feedback.

An Attractive Market

Aside from the ingenious concept and sleek digital interface, as we mentioned at the very beginning, our primary thesis around Bento is the vast market the company is disrupting. Most insurance businesses reach large markets because almost everyone needs insurance, regardless of industry or geography.

In the nearly $16 billion U.S. dental insurance market, Bento is aiming at a serviceable addressable market of $7.6 billion.

Not only is this a compelling market size for the company to target, but Bento is approaching its go-to-market strategy in a way that perfectly aligns with Companyon’s investment thesis, which seeks companies that sell to businesses and not directly to consumers (B2B).

Bento’s main focus today is selling group plans to employers, typically with less than 2,000 employees, and associations with large memberships. The company has already had several victories on this front, winning contracts with multiple associations and third-party administrators.

Bento’s B2B value-add is extremely compelling because of how much it can save small businesses and association members.

By switching to Bento, a typical 300-enrollee company will realize savings of nearly $83,000 per year, while a 2,000-enrollee company will see savings north of half a million. There is also minimal disruption because companies can keep much of their enrollment process the same and employees don’t have to change their dentists.

Bento’s secondary focus is pitching dental membership plans to high-volume dental offices that can help capture the 80 million Americans without group dental benefits. What better way to connect with these hard-to-reach customers than at the point of sale. Bento has also set up a Shopify-like experience for dentists to market themselves to the growing audience on the platform — it certainly helps that Bento is the only American Dental Association-endorsed solution for dental self-insurance.

Thus far, Bento has built a national dental network close to 100,000 strong and is starting to catch up to some of the large legacy insurance providers.

The savings Bento can help employers achieve, coupled with the ability to capture the uninsured market, makes the company an attractive growth story that we believe can significantly ramp up revenue in future years.

Always Invest In The Team

Regardless of the opportunity, every investor needs to trust and believe in the founders and team running the company. Fortunately, this was an easy box to check with Bento Founder and CEO Ram Sudireddy.

Sudireddy is an experienced serial entrepreneur who has launched and sold numerous startups. He was chairman of the board of directors at the IT recovery software company Sanovi, which IBM later acquired. He then founded and served as CEO and chairman of CHIL Semiconductor, which later got acquired by International Rectifier. Sudireddy then founded and served as CEO for Cimaron Communications, which AMCC acquired.

What stuck out to us is how Sudireddy can apply his technological skills and expertise across various industries. That shows how capable he is of understanding different markets and ecosystems and finding the cracks that can make them more efficient for many stakeholders across the supply chain.

The clever solution Bento has created and the large-scale market opportunity, as well as the founding team and alignment with our investment thesis, made Bento an easy investment for Companyon Ventures to pull the trigger.

From a Cold Email to Investment: Why We Invested in Fullcast

Posted on by erin

Conventional wisdom is that entrepreneurs seeking VC funding shouldn’t waste their time cold-emailing VCs. One day, our public mailbox, [email protected] received an email from Fullcast CEO, Dharmesh Singh. Dharmesh was raising funds to transition out of the seed stage into the expansion phase and was looking for an investor who could help them accelerate their go-to-market operations. He found our article on post-seed / pre-A fundraising and realized we’d be a great partner. He did his research on us and on our investment criteria, so we gladly responded.

On our first call, Dharmesh introduced me to the antiquated world of enterprise sales planning and revenue operations. It’s a world still using a patchwork of Excel, custom code, IT admin resources, and 3rd party consultants to plan sales operations. He explained how Fullcast empowers leading SaaS companies to plan, execute, and analyze their GTM strategy and to execute against it all with the Fullcast platform, fully integrated with Salesforce.com, and no IT needed.

Market Timing: The Rise of the CRO and RevOps

With the emergence of the Chief Revenue Officer (CRO) role and dedicated RevOps roles within the past decade, Fullcast is entering the market at an ideal time. RevOps is increasingly becoming a valued and critical business function at all companies.

RevOps has also become increasingly complex. RevOps includes quota setting, territory planning, and rep capacity planning. It also covers designing and implementing complex rules that model when to add, move, or reassign reps based on real-time changes in the pipeline, headcount, and changes to market conditions like we experienced in March of 2020.

SaaS and technology companies are growing and scaling faster than ever. The velocity of hiring, employee churn, and executing GTM at scale is ever-increasing and more complex than ever, further exacerbating sales GTM inefficiencies. In addition, the ubiquity of distributed and remote teams and the need for continuous adaptation and planning due to COVID-19 has created a world where sales leaders need to operate more flexibly and to be able to plan continuously. The “Annual” Sales GTM planning cycle is becoming a thing of the past – instead, sales teams need to be tweaking their sales and revenue operations on a weekly basis.

Companies that understand the function of RevOps and aligned their teams towards it grew their revenue 19% faster than those who didn’t.

Fullcast gives its customers a platform to seamlessly automate the planning and execution of revenue operations in Salesforce.com without requiring dedicated IT resources, sales operations people, or consultants.

Product Elegance and Sophistication

As part of Companyon’s due diligence, we asked the Fullcast team to give a sales pitch and product demo to some of the enterprise sales leaders and sales ops leaders in our Venture Partner network. These sales leaders have lived with the sales GTM planning and execution pain point for decades. They peppered the Fullcast team with all sorts of product capability questions and threw numerous edge cases at them. Fullcast seemed to have all of the capabilities that would automate what these sales leaders had struggled with in their business planning. Their feedback to me was, “If it actually does everything they say it does, this is solving a huge issue that every enterprise has.”

Founder-Market Fit

When reflecting on the question of how this team got their product so right when so many others have delivered cumbersome solutions that require heavy customization and consulting engagements to cater to sales and marketing organizations, I realized that this was a case of extreme founder-market fit. Founders Dharmesh Singh and Bala Balabaskaran were at Salesforce.com together and were responsible for solving this problem for Salesforce.com’s own sales and revenue operations. They personally owned these problems and had to build automated systems and tools to solve them.

This is at the root of Fullcast’s strongest differentiators against legacy general-purpose planning tools like Anaplan and Xactly which were primarily built for finance departments.

Fullcast is built by RevOps leaders for RevOps leaders and their customers can instantaly recognize that when they see the product for the first time.

 

Company-Companyon Fit

After finding conviction around the team, market, and platform, we realized that Fullcast was the RevOps software industry’s best-kept secret – quite literally. As a seed-stage company focused on product development, early customer adoption, and finding product-market fit, it’s not surprising that Fullcast was virtually invisible to Google, Gartner, and G2. They had a founder-led sales effort and no marketing team. Customers were finding Fullcast through referrals and some impressive founder outreach and community building, which was a great approach to find product-market fit, but not scalable.

Fullcast also had feature-based messaging and positioning, a home-grown website, and a marketing and selling emphasis on features and capabilities, vs. customer value and ROI.

Most expansion-stage VCs shy away from investing in companies with such gaps in their go-to-market infrastructure, but this is where we roll up our sleeves at Companyon Ventures.

We’re proud to have led a comprehensive process of GTM transformation with the Fullcast team, starting with a revamp of the company’s messaging and positioning led by our Operating Partner, David McFarlane and our Platform Team partners at Ideometry. Founders usually have the best marketing content in their heads- we use a framework to extract it and help organize it for consumption by the outside world. Once the messaging and positioning framework was developed, Ideometry redesigned and rebuilt Fullcast’s website using the new messaging and positioning content which is now live! We also took the lead on implementing the demand-generation program, tools, and process.

In parallel, we brought in our recruiting partners to help the company find a sales leader for the company who recently joined the company. Our platform partners also built out a marketing automation infrastructure, creative marketing content, and started running demand-generation campaigns which are in full swing now. We also built out a fully integrated SaaS and Financial KPI dashboard to help the company identify, understand, and measure their key KPIs. We consider all of these activities to be critical to a company’s path to a downstream outsized expansion funding round like our portfolio companies, RoadSync and Apty recently closed.

We’re confident that the team Fullcast would have done fantasist things without us, but we’re proud to have helped turbo-charge their expansion efforts and add our go-to-market expertise and bandwidth to the company. We’re lucky to have Epic Ventures, WestWave Capital, and CreativeCo Capital as co-investors in this round with us and Bob DeSantis joining the board. They’re each adding their own unique value to the team Fullcast.

To bring this back to back to where I started with the topic of cold-emailng VCs, definitely skip the untargeted mass emails. But, if you do target your investors with some old-fashioned research and thoughtful outreach, good things can come from it.