In Conversation With: The CEO Series featuring Deborah Kobewka, CEO of Evaluate

May 5th, 2021

In Conversation With: The CEO Series featuring Deborah Kobewka, CEO of Evaluate


In this interview, Ruby speaks to Deborah Kobewka, CEO of Evaluate. Deborah shares her insights on raising additional funding during Covid, restarting and completing the transaction with HG ultimately re-investing in the business, and her thoughts on the impact of the pandemic on the pharmaceutical sector and on the Evaluate business.

- HG first become involved with Evaluate in 2016 as a minority investor. Evaluate were then developing their plans for re-investment in early 2020 when the pandemic hit, and had to restart the process and ultimately went on to complete the transaction by August last year, with HG re-investing in the business to become a majority shareholder.

- Evaluate continued to deliver strong performance and growth last year due to their unique position between the pharma and technology industries – two sectors that continued to do really well in the current environment.

- Their customers relied on Evaluate for critical data and analytics to help them prepare for the significant unknowns that their businesses were facing.

- Deborah talks about the Covid impact to the pharma industry – with two clear trends in the short term: scientific acceleration, but also rising valuations. In the long term, the sustainability of those high valuations may well be put to the test, and there will be other accelerations in the industry, for example the growth of digital health and telehealth solutions.

- As for the impact to Evaluate’s business, Deborah sees that the need to better predict the future will really shape the business, using artificial intelligence and data technology to build out better ways to predict the risk and return of pharmaceutical R&D assets. They are now focused on expanding capabilities in those areas, further leveraging technology to meet growing demands for new predictive tools.

- Deborah also shares her advice to other CEOs: it is important to have a strong executive team and the right team, as well as good advisors; find the right time in your growth cycle to bring in a new investor; consider the scrutiny you will go through in the process, so have strong confidence in the business strategy and great evidence to back it up.

Full Transcript:

Ruby Sheera:

Hello, everybody, I'm here with Deborah Kobewka, who is the CEO of Evaluate. Evaluate is an HG portfolio company. Evaluate provides commercial intelligence and critical data for the pharma sector. Thank you very much for joining me, Deborah, it’s a pleasure to have you with me today.

Deborah Kobewka:

Thanks, Ruby, and it’s really great to be here.

Ruby Sheera:

I’ve got a few questions Deborah, usual routine. So I’m going to start off, kicking off with the first one, if I may. What were the particular challenges that this Covid climate has created in trying to raise additional funding?

Deborah Kobewka:

What an incredible period we’ve been through. Let’s think back. When Covid hit a year ago, nobody knew what was going to happen. We were entering a situation that none of us had really experienced before in any way. If I remember rightly, the financial markets were all over the place, and there was a lot of doom and gloom predictions and scenarios etc.

That was about a year after I had joined Evaluate. I joined Evaluate in March 2019 and part of the attraction to me at Evaluate was because I knew the company well and I knew they had a very strong market position, a great reputation with clients and because of the tremendous potential of the data and technology that they had and products to support the pharma industry.

Basically, thinking about where we were then in time in terms of the investment cycle; when I joined, I was really immediately very focused on preparing the business for re-investment. So when the pandemic hit about year ago, we'd actually been, well we were sort of well-developed in our plans for re-investment, and actually pretty, fairly close to a transaction when the pandemic started to really impact.

I think the reality at that point was there was so much economic uncertainty, as I've mentioned, it really put the conversations on pause, just while everybody took stock, trying to figure out what was going to happen. So I think really that was our primary challenge that we faced. We were poised to move and then suddenly we had to stop and see what was going to happen in terms of the global situation.

Ruby Sheera:

On that note, what were the factors that allowed you to restart the process? Because you did, and obviously with a successful outcome.

Deborah Kobewka:

We did, and actually we restarted the process roundabout May last year, so May, 2020. Actually then ultimately went on to complete our transaction by August, so fairly quick in the end. I think the key factors were our business performance, and also the strategy work and preparation that we had done ahead of the pandemic.

Firstly on the business performance, despite the pandemic, our business has really continued to deliver strong performance and growth in the way that we had anticipated. I think a lot of that has to do with where Evaluate sits. We're in a fairly unique position between pharma and technology industries; two sectors that actually continued to do really well in the current environment.

Our customers who are, of course the pharma industry, they had the dual challenge of continuing their ongoing business-as-usual agendas, but then additionally, and really rapidly, having to respond to the Covid challenge. And I guess even on top of that, they had to consider uncertainties and opportunities that the pandemic might create, so we continue to see really significant increase in demand for our services.

Customers just continue to seek out the data, the analytics that can help them to prepare for some of the really significant unknowns that their businesses face. We do a lot of work in predictive analytics and data technologies and that really made us very uniquely suited to meet those needs and continues to do so. So that's kind of where we were at.

And then of course we had to rapidly relocate to work from home, but that happened really frankly, with minimal disruption, including our offshore team in India. We have over a hundred people in India and like us, they had to suddenly go into work from home mode. But barring a few sort of hiccups, things went incredibly, incredibly smoothly.

So the Evaluate team continued to deliver really excellent results, and indeed, we continued on our expansion plans as we had planned initially. Delivering new products, and then continuing to push forward on our investment agenda, around people, around technologies, data operations.

Funnily enough, even as we went into lockdown, we were able to close out on a small acquisition. So the business continued to perform really, really well. And then to my second point, planning and preparation prior to the pandemic was really critical and as I’ve said, we'd already started that, we were well into that process. We came into the transaction discussion then with a very concrete, ambitious evidence-based strategy for growth.

So I think because we were able to demonstrate that business progress in spite of the pandemic, and we also had a great strategy, it really made it quite easy for the process to restart.

Ruby Sheera:
My next question is around the outcome. Obviously, HG ended up investing in Evaluate. From your perspective, why was HG the right investor to take Evaluate’s business forward?

Deborah Kobewka:

Yes, HG became involved with the business in 2016 as a minority investor, and that was before I joined Evaluate. But with their support, that really helped to grow and scale the business, quite frankly, at a pace that probably just wouldn't have been feasible without their investment and guidance.

HG is Europe's largest investor in software and services, and so they bring tremendous amount of experience and knowledge to the table. They're actually delivering a lot of growth, across their portfolio of companies, sort of circa 22% growth, I think, annually, so it's clear that their approach and their expertise really delivers results.

So for me as the CEO of the Evaluate business, I really valued the relationship with HG as I joined, and they have been super supportive of our strategy and focused on our growth journey with us. So it was a fairly easy choice to have their support on a re-investment opportunity.

I guess also they have a lot of expert resources that they bring to support our business, indeed to support all of their portfolio businesses in particular areas. They help and support in technology, also in sales and marketing execution, and even functions like recruitment, so lots of support.

I think for me, their interest and excitement in re-investing in August, now as our majority shareholder, it was just a great vote of confidence for me and the business.

Ruby Sheera:

Deborah, one of the other questions, which has been sort of been sitting there, mulling over in the back of my mind, which I was keen to ask you was, what do you believe will be the short- and long-term impact of this pandemic on the actual pharmaceutical sector as a whole?

Deborah Kobewka:

Yes, I think that's really a great question, and one certainly a lot of people are thinking about, and obviously we're thinking about as well.

In the short term, we're seeing two clear trends: scientific acceleration, but also rising valuations. So I think for me, the acceleration in sciences is really interesting and particularly, thinking about that in terms of vaccine development. Without doubt the mRNA technologies that we're seeing in the Pfizer vaccine, for example, that's going to continue to be a great source of innovation as a platform.

And then, thinking about those rising valuations, the pandemic has actually had an incredible impact on financial, the financial markets, enthusiasm for pharma, and indeed for pharma businesses of all sizes. So we've seen record amounts of venture capital and rising market valuations.

In the longer term, obviously the sustainability of those high valuations may well be put to the test. I think maybe also in the longer term, there's probably some other accelerations we should think about as well, in terms of the industry. Pharma companies and regulatory agencies have just responded in such a fantastic way to the Covid-19 pandemic; incredible speed, of course in doing so, they create expectations, and may well be that there will be expectations and pressures to deliver against those sort of shorter approval timelines in the future.

And I guess, thinking about the broader healthcare market as well, definitely seeing that acceleration in the growth of digital health and telehealth solutions. Obviously, those solutions existed prior to Covid-19, but I think the social restrictions that have been limiting interactions in a way, sort of normalized the application of digital and telehealth. For many segments of healthcare that may not go away. I actually hope it doesn't because I think it brings a lot of efficiencies.

Maybe finally, just thinking about transparency and accountability from the industry, in light of the recent concerns around the safety and efficacy that we've seen with certain Covid-19 vaccines, I think what you see from that is how important it is for the pharma to be really clear and careful on the safety and clinical data that they're providing to consumers, to physicians and regulatory agencies.

I guess that demand and interest is only going to increase in the future.

Ruby Sheera:

Evaluate provides critical data to the pharmaceutical sector allowing, I suppose, decision makers to stay informed and empowered. What lasting impact do you believe this pandemic has had on your business?

Deborah Kobewka:

Yes. I mean, I would say, in a changing market environment like the one that we're currently living through, data and information becomes even more vital. Now the pharma industry is as long approach to the uncertainties of their R&D, development and drug commercialisation using predictive data and indeed modelling. This is required because they really need to understand the future.

I think that's all been heightened by the unpredictable and significant impact of Covid-19 both in positive and negative ways. I mentioned earlier, we've seen how just simply the pace of pharma’s work continues to accelerate, and that means that data and analytics needs to involve at a comparable speed.

So there's probably a combination of a couple of factors; the need to better predict the future and the acceleration of the industry that are going to really shape our business, at the moment and as we go forward. Even before the pandemic hit, we were using artificial intelligence and data technology to build out better ways to predict the risk and return of pharmaceutical R&D assets.

So we're now focused very much on expanding our capabilities in those areas, further leveraging technology to meet growing demands for new predictive tools, but also to provide data to speed that reflects the day-to-day changes that are taking place in the market.

Thinking about our business as well, maybe a third thing from the pandemic that has impacted our business, and maybe that this is closer to home and that's just the renewed focus on the wellbeing of our employees. Our culture as a company has always been very, very centred on our employees, helping them to achieve success and recognising and celebrating that success. But of course, this year has just been the most incredibly difficult one and has presented many, many opportunities for us to support them in many different ways.

We've really looked at in a very practical way, how we support very flexible working hours, new channels of company communication. And we've also doubled down on our focus on things like diversity and inclusion as well. Because it's just been an incredible year of unprecedented change, I guess the constant is our employees are always going to be key to our success. So we've really wanted to double down on that commitment to their wellbeing. And that's something, of course that will just continue into the longer term as the business has to think about coming back into a more regularised environment.

Ruby Sheera:

I think that's key, I think that employee wellbeing is going to be something that's definitely going to be on any decent employer’s mind, to ensure as we make some sort of transition back, that it’s as positive experience as possible for everyone involved. Final question, knowing what you know now, what advice would you provide a CEO contemplating a similar journey to the one that you've just been on?

Deborah Kobewka:

Yeah, so certainly an incredible learning experience over the last couple of years. Thinking about the transaction, really important to have a strong executive team and indeed not just the executive team, but the next layer down before you start to embark on the process that we've been through, because transactions are a tremendous amount of work and of course that comes on top of the day job.

You have to have the right team with the right focus to ensure you're going to have a successful outcome. And not just your own team, but in a similar way, having good advisors to support you from outside of the business. Not just those that can deliver strong guidance on the transaction, but those that can provide a really independent perspective and insight. So whether that's through your vendor due diligence or legal management advice, all of that can make a really big difference to the outcome you achieve.

Timing is important, timing of the deal, because in any business, there can be ups and downs as you grow towards maturity. So I think actually finding the right time in your growth cycle to bring in a new investor is really important as well.

And perhaps also, just thinking about the amount of scrutiny that you go through in the process, you really need to be very strong and in a great position so you don't jeopardize your results. So I think that judgment around when to go for it and then being ready to cope with the scrutiny, I think it's really important.

And of course, you've got to have that strong articulation and confidence in your business strategy, and also great evidence that backs that up because you need that to be able to build the confidence that you're going to be successful and be able to communicate that. So that comes through the value proposition, clear market definitions, really clear on unique, competitive differentiators, and really concrete growth projections.

So all of that has to go into the mix and maybe just to reflect finally again, on that level of scrutiny, it is unparalleled, you've gotta be prepared for it. You’re going to go through some very thorough processes, a presentation, and you've got to be able to defend your strategy and make sure you've got lots of confidence in that.

The good part of that is, once you've been through that process, it's actually really valuable because then when you're in a post-transaction phase, any weak areas that were identified, you've got a strong focus on them. So it's actually a great process to actually have to go through.

Ruby Sheera:

Thank you very much Deborah. That was really, really insightful and genuinely appreciated the investment of your time and appreciate you taking the time to talk to us. And on a personal note, I'm absolutely delighted to be interviewing my first female PE backed Chief Exec, and I hope many more to follow. Thank you very much.


Tech & Tech Enabled Practice
Ruby Sheera

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