ONE investor breakfast briefing hosted by Will Vicars - here’s what we saw

Earlier this week, we flew up to Sydney to see our healthcare technology investment Oneview Healthcare plc (ASX:ONE) present its 2024 Full Year results to a small group of key investors and fund managers.

Will Vicars, co Chief Investment Officer at Caledonia, through various entities, holds 36.42% of ONE shares according to the latest substantial holder notice.

Vicars has been backing the company since 2013 when it was a private company. In his role at Caledonia Vicars has developed a reputation for identifying powerful commercial trends and themes in global markets and getting in early as they emerged.

Caledonia does not invest in many stocks - it places concentrated, high conviction bets - so it's interesting to see their co CIO so committed to ONE.

The fund’s strategy is to invest in high quality businesses “where long-term ownership is rewarded" - and typically has an investment horizon of 8 to 10 years.

All good news for our shared Investment in ONE.

Having major shareholders with a long term horizon and high conviction is a big plus for an emerging high growth technology company.

ONE overview

ONE sells technology to hospitals that improves the patient experience and helps healthcare systems run more efficiently.

It connects the patient in the hospital bed to nurses, doctors, medical specialists, meal service, records, educational content, and entertainment.

Amid a global nursing shortage, we expect ONE’s tech to become ever more important.

ONE’s technology saves nurses time and gives patients a digital experience they are familiar with.

ONE is currently capped at $190M, and had €13.8M ($24.6M) cash at 31 December 2024, and posted €1.5M revenue in the quarter ended 31 December 2024.

Key to its aspirations is a value added reseller agreement with ~$26BN capped Baxter International (Baxter sells a huge range of medical products and holds up to ~75% of the hospital bed market).

We previously wrote our detailed take on the Full Year results a few weeks back, and you can read that here.

What we learnt this week

Here is what we picked up by attending the investor briefing this week.

The company’s CEO James Fitter opened the briefing saying that ONE has secured more beds in the last two years than in the company's entire existence combined.

ONE is driving hard at rapidly scaling in the massive US healthcare market - and we judge ONE’s success based on how many beds their technology is deployed to.

In this business model, the key is securing deals with major healthcare systems in the US, or “logos”, which run hospitals or networks of hospitals.

ONE is starting to build momentum across the US, with a host of new sticky customers signing up for multi-year contracts.

The Company has acquired more new logos in the last two years than it did in the prior decade suggesting momentum is clearly accelerating.

James spoke at some length about their “land and expand strategy” highlighting numerous examples where initial 60-70 beds proof of concept projects transpired into a 1,000+ bed contracts.

Is ONE like Pro Medicus in the early days?

The growth above is somewhat similar to Pro Medicus’ growth over the years.

Pro Medicus had a slow start but after years of developing and selling its products, the “network effect” of reaching a critical mass of customers meant that sales and momentum accelerated rapidly.

Now Pro Medicus is now capped at A$21BN, after being in a relatively similar position as ONE several years ago with fewer customers.

The past performance is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

We are hoping that ONE’s recent momentum can start to steer the company on a Pro Medicus style scale up over the coming years.

What has changed with ONE in recent years?

James explained what had changed over the last few years that has kicked off ONE’s growth phase:

• ONE secured a major partner, the $26BN capped hospital bed maker Baxter, to help sell products into the US hospital market. (Baxter sells a huge range of medical products and is rumored to hold up to ~75% of the hospital bed market).
• Baxter conducted an industry wide RFP before selecting Oneview as their partner which is a powerful statement in and of itself.
• Oneview has now trained over 100 Baxter salespeople to resell their product in the US market – this compares to the 5 direct sales people Oneview employs.
• The pandemic re-asserted ONE’s value proposition from a “nice to have” product to a “key differentiator” for hospitals.
• Global nursing shortages have meant that hospitals need to do more with less. ONE’s product is a perfect solution to this.

The growth over the last two years is clear, but the effects of critical mass and network effects are yet to come.

There are over 900,000 hospital beds in the US, and ONE’s product is just 23,000.

The big upside here:

Over 80% of the market currently doesn’t have a patient experience platform and if ONE is able to capture just 15% of this market it could grow its revenue to the hundreds of millions of dollars.

Baxter relationship to drive ONE growth

ONE’s ace in the hole is its relationship with ~$26BN capped Baxter International.

Last month Baxter posted some images co-branding its product offering with ONE at the VIVE2025 conference - a big event on the calendar for the digital health tech industry.

Also, two weeks ago Baxter’s director of IT promoted the Oneview platform in an industry webinar.

Watch the full video here: Baxter: Empowering Patients Through Digital Transparency

(Watch the video here - this link takes you directly to where Baxter International talks about ONE’s products)

The Baxter partnership commenced in late 2023, which means that by the next half ONE is hoping to close some of the bigger hospital network deals from Baxter.

This is based on the typical 18-24 month sales cycle that ONE’s product has.

ONE’s leveraged to the growth in AI in healthcare

ONE is targeting a massive industry in the biggest economy in the world.

And healthcare is moving digital, with AI a big driver of efficiency.

Last month Microsoft released its “Dragon Co-Pilot” as a voice AI assistant to help clinicians document patient interactions.

ONE is in a good place to take advantage of the AI patient experience, and customers are already asking about certain AI products and features.

Back in February, ONE introduced Ovie, a new GenAI product that provides personalized, real-time support for patients and families throughout their hospital stay. (Source)

So there could be some major unexpected upside brewing for ONE in its ability to close major deals with new logos given its expanding product range that now includes AI.

We covered this in a recent ONE Quick Take: ONE strengthening its partnership with Baxter International

Final thoughts on the Caledonia Investments breakfast

Overall we got an excellent update on ONE’s progress, the discussion was robust and there was time for questions at the end:

One of the key questions asked was about the lag between when a bed is signed up and when revenue hits the account.

This teething issue has to do with the time between a contract signed and the system integration, however ONE’s new MyStay Mobile product should alleviate this challenge.

The MyStay mobile product allows patients to access the Oneview platform on their own phones or devices.

This reduces some of the friction to make a sale as well as the upfront integration.

All up, it was great to hear the Oneview update in person and thank you to the Oneview and Caledonia teams for hosting us.

What’s next for ONE?

More contracted beds and a transition to the more smoothed out revenue streams of a true SaaS model with MyStay.

We want to see ONE hit 25,000 beds - it’s our number one objective for ONE in our ONE Investment Memo.

We think by hitting all the objectives in that Investment Memo it will move ONE closer to realising our ultimate upside scenario for our ONE Investment, our ONE Big Bet:

“ONE will sign on enough new hospital beds at an accelerating rate to achieve a $1Bn valuation (based on 5x to 10x forward ARR multiple) and be acquired by a large health tech provider.”

NOTE: our “Big Bet” is what we HOPE the ultimate success scenario looks like for this particular Investment over the long term (3+ years). There is a lot of work to be done, many risks involved, and it will require a significant amount of luck. There is no guarantee that it will ever come true. Some of these risks we list in our ONE Investment Memo.

So we’ll be looking out closely for ONE to seal the remaining contracts in late stage negotiations and start to see Baxter’s 100 person strong salesforce deliver results.