Podcast Ep 217: Spectrum.Life CEO Stephen Costello on how the Irish business is taking on Europe’s healthcare market with ambitions to reach €100m in revenues by 2028.
With more than 7.2m lives looked after, Irish business Spectrum.Life is one of Europe’s fastest growing digital health providers and is targeting revenues of €100m by 2028.
We talk to CEO Stephen Costello about the company’s growth plans and opportunities in the global healthcare market.
“There’s nothing better than to love what you do and enjoy what you do and, when what we do is make an impact on people’s health and wellbeing, you just couldn’t ask for a better job, right?”
In May, we reported how Dublin-headquartered digital health platform Spectrum.Life raised €17m in a new funding round led by Act Venture Capital and existing investors. With this investment, Spectrum.Life plans to facilitate the recruitment of over 100 new hires over the next 18 months and accelerate its growth trajectory.
Established in 2018, the company has experienced strong 60% revenue growth in 2023 and is expected to exceed 50% growth again in 2024 with over three-quarters of new business coming from outside of Ireland.
The business currently employs at least 260 people, including more tha 125 clinicians, with 50% based in the UK.
Spectrum.Life looks after 7.2m individuals in the UK and Ireland, across multiple insurers, 3,000 corporate clients and 50 UK universities.
Elevating lives
Since Spectrum.Life’s launch in the UK market in 2020, the company has built an impressive list of insurance, corporate and university clients and more than 50% of revenue in 2024 will be in the UK market.
For Stephen Costello, who joined the business of chair and founder Stuart McGoldrick in 2014, as a graduate, it was a real case of landing on his feet. McGoldrick was already a successful health entrepreneur with businesses such as GP24 and Centric Mental Health, to name a few. He saw potential in Costello and by 2018 they had started Spectrum.Life.
“It was actually my first job out of college. Stuart was running a physio business that had a chain of clinics across Ireland and I worked mainly in marketing, commercial and technology. Looking back, I was probably a little too strong-minded for my own good but I ended up getting stuck in to areas where the business had bottlenecks and trying to solve problems, particularly around technology. They had no in-house coding ability at the time and I started to put apps and websites together.
“Stuart admired that approach and we worked incredibly well over the past 12 years. I think I can count the times we disagreed with each other on one hand.”
They found themselves working more and more with corporate customers and insurance businesses as well as moving into new fields like mental health.
“Stuart approached me about starting a stand-alone business that was focused on B2B and digital. That was six years ago and he took a big risk and I’ll always be grateful that he did it.
“There’s a lot of emphasis on wellbeing in businesses today. We identified this before the pandemic and it certainly increased in prominence during Covid-19 because companies were trying to make sure their staff were looked after and were in the best mental and physical condition. It was a bewildering time for people.”
Costello said that with the imminent arrival of auto-enrolment for pensions and in a time of full employment, SMEs in particular are looking at the kind of benefits and supports they can provide employees.
“Insurers in particular are tapping into that opportunity and that’s where we have seen a lot of growth in the past five months and will do in the future 12 months.”
In other words there is a boom in digital health and Costello believes financial services providers and insurers in particular are focused on health and wellbeing journeys within their apps and web platforms.
“We plug our services directly into them and we’re seeing higher expectations of digital journeys from individual consumers and employees of corporates. They are making decisions based on how easy is it to access their GP appointment, get mental health support for employees.”
Engage, empower and transform
Costello said it makes more sense for Spectrum.Life to ally with an insurance partner with 3,000 corporate clients and 2m or 3m members than to individually target each corporate customer.
“So yes, there is a drive for greater workplace wellbeing and we’re seeing much of our growth among insurers as a distribution partner.”
He notes that how insurance businesses are interacting with customers is also changing due to the proliferation of digital devices like smartwatches.
As such Insurance firms see the merit in being more proactive by encouraging people to live better, healthier lives; to sleep better, exercise more. It cuts down on the need to go to hospital, for one thing.
“We operate around a philosophy of ‘engage, empower and transform’. Engagement is a form of marketing funnel where we attract people to digital gym classes, eat healthy by providing content like recipes. Or to try a sober July and moderate alcohol. It’s about creating a strong proposition that is more than just people making claims, but driving people into the funnel through a proactive strategy. We empower by providing tools like symptom checkers or matching people with the clinician or service they need. We can see that if people are engaging with a lot of content around mental health we can recommend content or access to clinicians.
“In terms of ‘transform’, we help insurers manage digital health transactions, such as managing appointments, GP bookings, physio services and one app for mental health.”
Costello said that the digitalisation of health means there are lots of people who don’t see the same GPs regularly. “Digital health has become very transactional. The next time someone books an appointment it could be with a GP they’ve never met before. So we’re trying to make relational care happen within a digital environment.”
A key area of pride for Spectrum.Life, Costello says, is the quality of mental health services on offer to users of its platform. “We are passionate about those services. It goes back to engage, empower and transform.”
He says that employers and insurers get a dashboard of anonymised data that allows them to gauge their return on investment.
While Costello may have landed on his feet with his first job out of college, it was during his college years that he earned his chops as an entrepreneur. “I ended up repeating too many modules because one of my friends and I set up a business that registered businesses with the CRO. We basically built a site that would automatically register businesses and then sell them websites. It was good pocket money, but crucially I learnt a lot about Adwords and SEO (search engine optimisation).
“So when I joined Stuart’s company as a kind of digital marketing executive, Stuart saw me as a conduit for fixing things and getting stuff done. It made me a practitioner across the whole business and I really understood every cog in the business. We were bootstrapped at that stage with no external funding and we really had to make sure we made payroll every month. It was a very fast way of learning everything about the business.”
The explosive growth of Spectrum.Life that came in the wake of the pandemic reinforced the founders’ mission. “One of our values is to change and save as many lives as possible.”
If the pandemic was the second chapter for the business, the next chapter is bedding down that culture but also Costello maturing as a CEO, relinquishing control of the smaller things in order to focus the more strategic priorities.
“We have clear goals we want to achieve. I am very focused on our operational model. I feel more like a CEO and by understanding what’s happening and delegating more, I can see what’s immediately in front of us. I get to spend a lot of time on the product, I spend time with customers and I spend a lot of time on culture and I’m just loving it.
“There’s nothing better than to love what you do and enjoy what you do and, when what we do is make an impact on people’s health and wellbeing, you just couldn’t ask for a better job, right?”
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