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Dec 21, 2021 · 15m · top-founders

MedStack Grows 300% TTM, Raises $3.2m Seed at $15m Valuation

Simon Woodside · 8m spoken Nathan Latka · 5m spoken
0:00 / 0:00

gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

Nathan Latka interviews Simon Woodside, co-founder and CTO of MedStack, exploring how the company scaled past a $2 million ARR run rate while providing turnkey compliance infrastructure for digital health developers. The conversation covers MedStack's $3.1 million strategic seed round, multi-cloud engineering architecture, and pragmatic approaches to SaaS valuation and founder dilution.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 37.3% of the talking time here. How this is scored →

Nathan as informed peer 4.4 Guest teaching 2.8 Guest disagreement 1.2 Nathan pushing back 3.0
05100:0010:000:44–4:18 · Nathan as informed peer 6/10 MedStack Overview and Healthcare Customer Use Cases Latka references historical data points from previous interviews including past ARPU and customer counts to calculate ARR. Simon politely clarifies that Latka had previously interviewed co-founder Balaji rather than him.4:26–7:04 · Nathan as informed peer 5/10 Seed Funding Round, Dilution, and Strategic Backers Latka calculates implied dilution and valuation, questioning why founders would dilute if they were near cash-flow neutral. Simon explains the strategic necessity of health and telco backers for enterprise credibility.7:08–11:28 · Nathan as informed peer 7/10 Founderpath SaaS Valuation Tool Announcement Latka cites NDR valuation benchmarks and challenges Simon's assertion that healthcare infrastructure is an unsexy vertical facing geographic discounts. Simon stands his ground regarding VC sector sentiment and Canadian market realities.11:30–13:33 · Nathan as informed peer 1/10 Multi-Cloud Roadmap and Enforced Security Guarantees Simon outlines technical scaling challenges, Azure quota architecture, and MedStack's non-configurable security defaults. Latka listens quietly and admits technical details are outside his wheelhouse.13:45–15:19 · Nathan as informed peer 3/10 Famous Five Questions and Founder Reflection During the Famous Five, Simon attempts a joke answer regarding coffee for what he wished he knew at 20. Latka pushes back to get a genuine founder reflection before concluding with a company summary.0:44–4:18 · Guest teaching 3/10 MedStack Overview and Healthcare Customer Use Cases Latka references historical data points from previous interviews including past ARPU and customer counts to calculate ARR. Simon politely clarifies that Latka had previously interviewed co-founder Balaji rather than him.4:26–7:04 · Guest teaching 2/10 Seed Funding Round, Dilution, and Strategic Backers Latka calculates implied dilution and valuation, questioning why founders would dilute if they were near cash-flow neutral. Simon explains the strategic necessity of health and telco backers for enterprise credibility.7:08–11:28 · Guest teaching 2/10 Founderpath SaaS Valuation Tool Announcement Latka cites NDR valuation benchmarks and challenges Simon's assertion that healthcare infrastructure is an unsexy vertical facing geographic discounts. Simon stands his ground regarding VC sector sentiment and Canadian market realities.11:30–13:33 · Guest teaching 6/10 Multi-Cloud Roadmap and Enforced Security Guarantees Simon outlines technical scaling challenges, Azure quota architecture, and MedStack's non-configurable security defaults. Latka listens quietly and admits technical details are outside his wheelhouse.13:45–15:19 · Guest teaching 1/10 Famous Five Questions and Founder Reflection During the Famous Five, Simon attempts a joke answer regarding coffee for what he wished he knew at 20. Latka pushes back to get a genuine founder reflection before concluding with a company summary.0:44–4:18 · Guest disagreement 1/10 MedStack Overview and Healthcare Customer Use Cases Latka references historical data points from previous interviews including past ARPU and customer counts to calculate ARR. Simon politely clarifies that Latka had previously interviewed co-founder Balaji rather than him.4:26–7:04 · Guest disagreement 1/10 Seed Funding Round, Dilution, and Strategic Backers Latka calculates implied dilution and valuation, questioning why founders would dilute if they were near cash-flow neutral. Simon explains the strategic necessity of health and telco backers for enterprise credibility.7:08–11:28 · Guest disagreement 3/10 Founderpath SaaS Valuation Tool Announcement Latka cites NDR valuation benchmarks and challenges Simon's assertion that healthcare infrastructure is an unsexy vertical facing geographic discounts. Simon stands his ground regarding VC sector sentiment and Canadian market realities.11:30–13:33 · Guest disagreement 0/10 Multi-Cloud Roadmap and Enforced Security Guarantees Simon outlines technical scaling challenges, Azure quota architecture, and MedStack's non-configurable security defaults. Latka listens quietly and admits technical details are outside his wheelhouse.13:45–15:19 · Guest disagreement 1/10 Famous Five Questions and Founder Reflection During the Famous Five, Simon attempts a joke answer regarding coffee for what he wished he knew at 20. Latka pushes back to get a genuine founder reflection before concluding with a company summary.0:44–4:18 · Nathan pushing back 2/10 MedStack Overview and Healthcare Customer Use Cases Latka references historical data points from previous interviews including past ARPU and customer counts to calculate ARR. Simon politely clarifies that Latka had previously interviewed co-founder Balaji rather than him.4:26–7:04 · Nathan pushing back 4/10 Seed Funding Round, Dilution, and Strategic Backers Latka calculates implied dilution and valuation, questioning why founders would dilute if they were near cash-flow neutral. Simon explains the strategic necessity of health and telco backers for enterprise credibility.7:08–11:28 · Nathan pushing back 6/10 Founderpath SaaS Valuation Tool Announcement Latka cites NDR valuation benchmarks and challenges Simon's assertion that healthcare infrastructure is an unsexy vertical facing geographic discounts. Simon stands his ground regarding VC sector sentiment and Canadian market realities.11:30–13:33 · Nathan pushing back 0/10 Multi-Cloud Roadmap and Enforced Security Guarantees Simon outlines technical scaling challenges, Azure quota architecture, and MedStack's non-configurable security defaults. Latka listens quietly and admits technical details are outside his wheelhouse.13:45–15:19 · Nathan pushing back 3/10 Famous Five Questions and Founder Reflection During the Famous Five, Simon attempts a joke answer regarding coffee for what he wished he knew at 20. Latka pushes back to get a genuine founder reflection before concluding with a company summary.

speaking balance: gold is Nathan, purple is the guest (3 minute bins)

0:00 · Nathan 37.6% · guest 62.4%0:00 · Nathan 37.6% · guest 62.4%3:00 · Nathan 41.2% · guest 58.8%3:00 · Nathan 41.2% · guest 58.8%6:00 · Nathan 37.1% · guest 62.9%6:00 · Nathan 37.1% · guest 62.9%9:00 · Nathan 43.2% · guest 56.8%9:00 · Nathan 43.2% · guest 56.8%12:00 · Nathan 21.1% · guest 78.9%12:00 · Nathan 21.1% · guest 78.9%15:00 · Nathan 57.2% · guest 42.8%15:00 · Nathan 57.2% · guest 42.8%
Sharpest disagreement ▶ 10:13 Simon argues VC sector and location discounts

Simon pushes back against Latka's expectation of higher valuation comps by claiming compliance platforms are currently unsexy to VCs and Canadian startups lack Silicon Valley premiums.

 Hardest push from Nathan ▶ 10:31 Latka challenges unsexy market framing

Latka explicitly rejects Simon's premise, countering that rapid revenue growth and narrow vertical moats make businesses highly attractive regardless of trendiness.

 Biggest teaching moment ▶ 12:56 Simon breaks down architectural security differentiators

Simon explains how MedStack enforces mandatory firewalls and encryption by default to streamline 300-question hospital vendor assessments, contrasting it directly with standard AWS/Azure configurations.

 Nathan holds their own ▶ 9:41 Latka benchmarks NDR against 40-50x valuation multiples

Latka demonstrates SaaS market expertise by connecting 150% NDR metrics directly to premium revenue multiples and questioning why MedStack priced its round at only $15M.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
MedStack Overview and Healthcare Customer Use Cases 6312 Latka references historical data points from previous interviews including past ARPU and customer counts to calculate ARR. Simon politely clarifies that Latka had previously interviewed co-founder Balaji rather than him.
Seed Funding Round, Dilution, and Strategic Backers 5214 Latka calculates implied dilution and valuation, questioning why founders would dilute if they were near cash-flow neutral. Simon explains the strategic necessity of health and telco backers for enterprise credibility.
Founderpath SaaS Valuation Tool Announcement 7236 Latka cites NDR valuation benchmarks and challenges Simon's assertion that healthcare infrastructure is an unsexy vertical facing geographic discounts. Simon stands his ground regarding VC sector sentiment and Canadian market realities.
Multi-Cloud Roadmap and Enforced Security Guarantees 1600 Simon outlines technical scaling challenges, Azure quota architecture, and MedStack's non-configurable security defaults. Latka listens quietly and admits technical details are outside his wheelhouse.
Famous Five Questions and Founder Reflection 3113 During the Famous Five, Simon attempts a joke answer regarding coffee for what he wished he knew at 20. Latka pushes back to get a genuine founder reflection before concluding with a company summary.

Statements from this episode (10)

Assertion Not checkable as stated
MedStack averages $1,500 to $2,000 in monthly revenue per customer
“So the average is you know, there's definitely quite the range from small to large, but kind of like typically between, you know, our average is going to fall like 1500 to 2000 US dollars a month.”
Simon Woodside Dec 21, 2021 ▶ 2:14
Assertion Not checkable as stated
MedStack serves approximately 90 total customers
“I think it's around 90.”
Simon Woodside Dec 21, 2021 ▶ 3:19
Prediction Not checkable as stated
MedStack projects $2M ARR by the end of 2021
“We're just shy of two million ARR. So it's like probably a little bit less than that, but we'll, we'll be hitting two million ARR by the end of the year.”
Simon Woodside Dec 21, 2021 ▶ 3:33
Disclosure
MedStack closes $3.1M funding round led by Blu Ventures and Telus
“So we actually just completed a raise of 3.1 million. And so that was led by blue ventures and tell us one of our previous investors investors as well.”
Simon Woodside Dec 21, 2021 ▶ 4:27
Disclosure
MedStack has grown to 15 full-time employees
“Oh, we're 15 now.”
Simon Woodside Dec 21, 2021 ▶ 7:02
Assertion Not checkable as stated
MedStack estimates its net revenue retention between 110% and 120%
“No, I don't think we're quite there. I think it's, I don't, I think it's like 1.1 or 1.2, something like that.”
Simon Woodside Dec 21, 2021 ▶ 9:34
Assertion Not checkable as stated
Latka: 150% NDR drives 40x to 50x SaaS premium valuations
“Some of the valuations where you're seeing 40 and 50 X multiples are ones where net dollar retention is like a 150%, even if revenue growth overall is slower, but your NDR is really high. That's by far where the premium valuations are happening today.”
Nathan Latka Dec 21, 2021 ▶ 9:45
What-if
Woodside claims MedStack's valuation suffered from being based in Canada
“And then the other thing is, you know, we're a Canadian company, so we don't get the Silicon Valley. If we were a Silicon Valley company, yeah, we would have it would be a different story, but you know what?”
Simon Woodside Dec 21, 2021 ▶ 10:51
Assertion Not checkable as stated
MedStack hit Azure quota limits running 750 VMs and databases
“With Azure, we, like, we're hitting quota limits, because we're running, like, a lot of resources. I mean, you know, it's like, 750 different VMs and databases, which may not seem that much for some people running enterprise stuff, but we were certainly hittin…”
Simon Woodside Dec 21, 2021 ▶ 12:00
Assertion Supported
MedStack differentiates from hyperscalers with enforced, mandatory security defaults
“This is what really differentiates us from, like, an Amazon or an Azure is, you know, for MedStack, firewalls are on by default, and our customers can't turn them off. We encrypt all incoming communications. By default, you can't turn it off. We back up everyt…”
Simon Woodside Dec 21, 2021 ▶ 13:07
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