According to IDC research, the $1.6 trillion life sciences industry spent more than $44 billion in technology investments in 2012. Of this figure, $28 billion was spent on software and services, and $16 billion was spent on infrastructure. As in other industries, cloud computing is also seeing strong adoption within the life sciences industry.
Pleasanton, California-based Veeva Systems is one player that is witness to this phenomenon of strong growth. Veeva was founded in 2007 by Peter Gassner, Matt Wallach, Doug Ostler, and Mitch Wallace. The founders came together to deliver industry-specific business solutions over the cloud. Known as the Industry Cloud, an industry-specific cloud offering is very useful for global enterprises that operate in highly regulated environments like that of the life sciences sector.
Today, Veeva provides cloud-based customer relationship management and regulated content management solutions for the biotechnology industry. Through its solutions, health care providers can use the cloud for services such as payroll and expense management and customer relationship management. The CRM solution helps with drug sample tracking, electronic signature capture, and healthcare affiliations management. Through Veeva CRM, customers are able to access applications on mobile and other computing platforms in a user friendly, media-rich form. Veeva Vault is a regulated content management and collaboration solution that manages content collection and organization, workflow, and approval processes, which are especially critical in activities such as clinical trials. Finally, Veeva Network is a customer master solution that is soon to be released and will focus on master data management for the healthcare provider to help with sales and marketing.
Veeva is a global organization, with more than 30% of employees located outside the U.S. in cities that include Barcelona, London, Paris, Beijing, Shanghai, and Tokyo. The company’s solutions cater to global regulatory requirements and are available in 27 languages. They have been adopted by more than 170 life sciences customers across 75 countries. The customer list includes names like Bayer HealthCare AG (BAYZF), Eli Lilly and Company (LLY), and Novartis International AG (NVS), to name a few.
Veeva has seen strong revenue growth over the last few years. Revenues grew from $61.3 million for the year ended January 2012 to $129.5 million for 2013. For the six months ended July 2013, revenues grew 71% to $92.4 million. Veeva earns revenues through a subscription model and through professional fees charged for initial setup, training, and configuration services. Subscription services revenues grew from $32.6 million last year to $73.3 million for the recently ended year. For the first half of the current year, subscription services revenues grew 112% to $62.0 million.
Veeva has been profitable as well. Net income grew from $4.2 million in 2012 to $18.8 million last year. For the six months ended July 2013, net income grew from $7.4 million to $10.8 million.
Till recently, Veeva was a privately held company. Earlier last week, it went public on the NYSE and raised $261 million by selling 3.33 million shares at $20 each. The stock has fared well in its first few days of listing and touched a high of $49. It is currently trading at $43, with a market capitalization of $5.26 billion.
Veeva’s biggest strength lies in its Industry Cloud feature that helps it to gather insight into industry-specific data to spot trends and identify gaps that need to be filled by technology vendors.