National Vet Care founder returns to vet sector with practice management tech, e-commerce venture

National Vet Care founder returns to vet sector with practice management tech, e-commerce venture

VetXtend founder Tomas Steenackers.

More than four years after Tomas Steenackers' vet roll-up National Veterinary Care (NVC) was sold to VetPartners for more than $250 million, the prolific entrepreneur has returned to the sector with VetXtend, a tech platform aimed at lifting the productivity of independent clinics with 130 already signed up to the service in Australia and New Zealand.

Whilst at National Vet Care the business model was built on acquisition and lifting the performance of practices through corporate support - a model he has mimicked in another industry with the ongoing venture National Optical Care - his latest tech play strives for efficiency gains in a different segment of the vet market.

It is a segment that has been struggling with consumers' increasing shift to online purchases for their pets, dampening clinics' retail opportunities and sales margins, coupled with the structural challenges of staffing shortages that mean vets are now more time poor than ever before between administration, marketing, business management, and most importantly, treating animals.

"It's the perfect storm for us to come in. What we’ve done is we’ve created VetXtend, which is a B2B (business-to-business) brand – we want to be an extension of the vet clinic to help them navigate the difficult times," Steenackers, a former Australian Young Entrepreneur of the Year, tells Business News Australia

"What happened in corporate has evolved. It was a really good springboard to understand the market, but the reality is there are probably 500 practices out of 3,000 under corporate ownership, so there's still a massive number of independents which is great. Forty per cent of those independents are too small to fit in a corporate acquisition. A corporate won’t buy a practice under $1.2 million, and they struggle with succession planning.

"What we've done is taken some of the tools we worked with in the corporate world and tried to make them accessible to independent vets to make them more competitive, with the added ability to spend more time on things that matter to their business. On top of that, they can earn passive income every month because they're referring to us on the retail side."

When Steenackers had the idea for this business concept, a couple of years ago he enlisted the help of former NVC execs including chief marketing officer (CMO) Paula Sadler to develop a plan.

"We have developed the capability of connecting to the practice management system and the finance system also, and the first thing we do is give them an amazing dashboard with a lot of valuable information about how the practice is going, what needs improvement, what you need to stop doing," he says.

"For example, Paula and I are able to show them that selling a bag of food is probably not really accretive any more, and that they should focus maybe on professional services like dental, X-ray or surgery."

In conjunction with the VetXtend brand, the group has also launched e-commerce brand PetPA which sells a wide range of retail products for pets along with an online pharmacy, and Thriving Pets wellness plans aimed at both pet parents and vets to improve compliance from pet owners.

"If a clinic refers a bag of food to us, we can ship it to their clients faster, better and cheaper, and we can share the cost of that bag of food so we get a portion of that revenue," Steenackers explains.

"We can do a lot of reminders and educational campaigns about why you should come back to the vet to do dental or buy certain products," he adds.

"We can also follow the growth phase of the client, which a vet never has time to do. There’s a massive shortage in vet clinics where you might know that a customer has a puppy and they bought a bag of food that was perfect for when they were a puppy, but as they become a teenager or a senior the food needs to change."

Sadler says the group, based on the Gold Coast but doing business all over the country and across the Tasman, is now in a position where it is onboarding five to 10 practices every week.

"It was really well received by independent practices, because they’ve got that financial return coming back and all the expertise that we've developed, all the knowhow that we have," says Sadler.

"We've been able to build that technology stack, the platforms, and set up a program where there's a win-win. The win for them is financial and more time, and the win for us is because we've got the reach to the pet parents in a really cost-effective way, because it’s a really competitive space and we’ve carved out that niche."

Sadler adds that securing clients was probably made easier by the existing reputation she and Steenackers already have in the industry with active contacts. 

"For me, the devil’s in the detail and the service that you give people. Because we’re small and agile as a business, even though we’re growing quickly, we know who our customers are and we know the actual people behind it," she says.

"And we care that we’re going to make a difference to them as well."

Steenackers says there are now 130 practices using the services, which for context compares to the biggest veterinary corporate in Australia having around 270 practices under its ownership.

"Within the last few months we’ve been able to bring 130 practices, and we think in the next 12 to 18 months we’ll be at around 200 to 300 practices," he says.

"We know we can talk to roughly 400,000-500,000 pet parents, so it’s becoming pretty aggressive as an educational platform where we can talk to people.

"If we end up at 300 practices, that’s a 1.2 million reach of customers, so it’s becoming quite substantial, whereas if you’re on an e-commerce platform it’s really hard to achieve that."

But the business case is about more than just saving vets time and gaining reach via their client base for VetXtend itself. Steenackers says it is also about helping vet practices re-engage with patients.

"There are a lot of patients that haven't come to the vet for 15 months; we can also help them re engage them to make sure they come back in the practice first and foremost, and after that PetPA and Pet Pharmacy can help them sustain some of their needs," he says.

"I think that’s where the model becomes really valuable for everyone in the equation.

"When we send an email to a customer on behalf of the vet, we see a 40-50 per cent opening rate which is pretty big, and a 3-5 per cent conversion, so that means you can see how relevant we are to the consumer – otherwise people wouldn’t open the email, and wouldn’t action it."

Steenackers says the e-commerce platform has technically been operational for 18 months, but the total business has really only ramped up recently with the official launch of the VetXtend service, following a $1.6 million raise in January to continue research and development (R&D) and ensure systems were delivering the best outcome for clients.

"We are also in the process to review and evaluating some potential acquisitions to continue our growth in the next 12 months," he adds.

"We want to keep a small team to make sure we really relevant to them next. When we get to that 400-500 practices and we have a nice platform, the next typical move would be the US and UK markets, which are similar."

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