Friends Ed Bradley and Tim Ingham reckon they could help save the NHS £700 million in the next few years.And no, this is not the latest self-aggrandising claim peddled by politicos on the side of an infamous red bus.
The two entrepreneurs, who set up their technology business Virtualstock on Fulham Road in 2004, are helping hospitals across the country to cut costs.
Their software, called The Edge, allows about 90 NHS trusts — including Guy’s and St Thomas’ and University College London Hospitals — to order anything from syringes to pens faster and at better prices.
Bradley explains: “Whether it’s a receptionist buying stationery, a nurse buying latex gloves or a surgeon buying a hip replacement, they do so at a price that is specific to their hospital — but in some instances they could be paying up to 50% more. There is no visibility.”
During the Tony Blair era, private firms built a string of hospitals to tackle under-investment in public services. But an unintended consequence has been a lack of transparency around prices and availability.
Bradley and Ingham’s software is an Amazon-style marketplace where suppliers can list all their products and how much they cost, for a fee, for hospitals to see and then place an order. Hospitals use it for free. The duo’s business turned over £4.5 million last year and revenues are expected to almost double this year. It raised £4.5 million from venture capital firm Notion Capital last year to expand, in return for a minority stake. “We run the business at the break-even mark,” adds Bradley. “We’re reinvesting everything that we earn.”
As well as providing the technology to the NHS, Virtualstock also sells its services to retailers such as John Lewis, Argos, Dixons Carphone or Tesco — although Bradley admits they took a “relatively significant” hit when the grocer decided to ditch its Direct website in May. “It was a big part of our business.”
“We sit between the retailer and all their suppliers. In the old days, retailers would basically send out emails and faxes and they didn’t know where any of the orders were — we just centralised the whole thing,” says Ingham, who is in charge of research and development.
Virtualstock, now based in Reading, tweaks existing systems rather than tear everything apart or build the technology from scratch.
“Tim has the most incredible brain for this sort of thing,” Bradley says about Ingham, who has spent years finessing the software.
Ingham brushes it off: “I’m dyslexic . It’s that side of the brain that’s more tuned in, being able to look at problems and find a way around it.”
The two met in their twenties, while living in Australia, at a house party, where Bradley jumped in the pool from the first-floor window and broke his arm. “We went to the hospital and we became good mates after that,” recalls Bradley, who was best man at Ingham’s wedding.
They ended up working together at the time for an IT company that serviced retailers. When the company eventually went bust, the two decided to set up shop at home. “Working for large corporates is something we both wanted out of,” admits Bradley.
The co-founders didn’t have a plan but they knew “a lot” about the supply chain. They rented the basement of an old fire station for £400 a month and bought furniture from eBay. But nobody wanted to buy the software they built with help from two developers.
“It wasn’t that people didn’t understand what we did, they didn’t have the budget for it. They were still putting their heads in the sand thinking the internet was going to be some sort of hag,” says Ingham.
To get money running through the business they ended up buying and selling Christmas trees for a profit from the car park outside of their office. “There were plenty of moments thinking we were bonkers and it wasn’t going to work,” laughs Ingham.
But Office Depot came knocking after three months and money began to trickle in. The financial crash followed and retailers — forced to cut costs and increasingly worried about Amazon — decided to get serious about how much and what they sold online. Sales took off and they bagged Tesco as a client in 2013.
Virtualstock, still majority owned by Bradley and Ingham, now has 105 staff and plans to expand more aggressively overseas and sell their tech to smaller retailers. They brought in Andrew Mills as chief executive in 2015, who worked for Samsung and IBM, and Rene Schuster, the old boss of Telefonica in Germany, as chairman in July “to put some structure into the business”.
“Trying to replace and build [IT systems] from scratch is going to take too long, the big thing that retailers do not have on their side is time,” says Bradley. And that’s where Virtualstock steps in.