How Sikka Reached 45,000 Customers With Just 45 Employees: The Economics of Embedded Distribution

How Sikka Reached 45,000 Customers With Just 45 Employees: The Economics of Embedded Distribution

One thousand customers per employee. That ratio shouldn’t be possible in B2B software.

In a recent episode of Category Visionaries, Vijay Sikka, CEO and Founder of Sikka, a retail healthcare technology platform that’s raised over $30 million, shared how his company serves 45,000 practices with a team of just 45 people. The economics seem impossible: 80%+ gross margins, 90%+ recurring revenue, 110% net dollar retention, EBITDA profitability, and 40-45% annual growth—all while processing a billion transactions daily for 150 million patients.

This is what happens when you architect distribution into your infrastructure rather than bolting sales onto your product.

The Impossible Ratio

Most B2B SaaS companies operate at very different ratios. A healthy enterprise SaaS company might support 100-200 customers per employee. High-touch models drop to 50-100 customers per employee. Product-led growth companies can push to 500-1,000 customers per employee, but usually with lower ACVs and minimal support.

Sikka hit 1,000 practices per employee while serving small businesses that typically need high-touch support. They did it by eliminating the largest cost center in most SaaS companies: sales and marketing.

“We have some of the biggest names in the industry. Dental, veterinary, optometry, for reputation management, revenue cycle management, payments, business performance management. All of them are using our platform in order to run their applications,” Vijay explains.

These partners don’t just use Sikka’s infrastructure. They actively acquire customers on Sikka’s behalf. “Because all the doctors, when they approach the doctor, they bring the doctor to our marketplace. The doctor signs the C. AI paperwork, business associate agreements, and then starts to get that service.”

The customer acquisition cost isn’t reduced. It’s eliminated. Partners bear the entire acquisition burden while Sikka captures the relationship.

Breaking Down the Unit Economics

The financial metrics reveal how this model transforms SaaS economics:

80%+ Gross Margins: Most B2B SaaS companies target 70-80% gross margins. Sikka exceeds this despite serving small businesses that typically require more support. The infrastructure approach means the platform scales without proportional cost increases. Adding new practices doesn’t require hiring more engineers or support staff—the infrastructure handles it.

90%+ Recurring Revenue: This metric indicates customers aren’t doing one-time purchases or projects. They’re subscribing to ongoing platform access. Revenue predictability enables lean operations because the company doesn’t need large sales teams constantly hunting new deals to replace churned ARR.

110% Net Dollar Retention: This is the killer metric. It means existing customers expand their spending by 10%+ annually, even accounting for churn. Sikka doesn’t just retain customers—they grow within accounts without additional sales effort.

“We are approaching. We are about 110% on net dollar retention,” Vijay notes. For context, publicly-traded SaaS companies celebrate 120% NDR. Sikka achieves 110% with 45 employees serving healthcare practices.

EBITDA Profitability: “We are EBITDA positive and we are actually really enjoying. We have our first year of profitability this year,” Vijay shares. Most SaaS companies burn cash for 7-10 years before approaching profitability. Sikka achieved it while growing 40-45% annually.

This isn’t profitability from slow growth or stagnation. It’s profitability from unit economics that work from day one because distribution costs approach zero.

The Zero-CAC Growth Engine

Customer acquisition cost (CAC) traditionally represents the largest expense in SaaS growth. Companies spend $1-3 to acquire $1 of ARR, hoping to recover that investment over 12-24 months through customer lifetime value.

Sikka’s embedded distribution model inverts this completely. When a payment processor wants to sell to a dental practice, they need Sikka’s infrastructure to access that practice’s management system. The payment processor:

1. Identifies the prospect
2. Runs the sales process
3. Bears the acquisition cost
4. Brings the dentist to Sikka’s platform for integration
5. Sikka signs the customer and captures the relationship

The payment processor paid $5,000-$10,000 in sales costs to acquire that customer. Sikka paid $0 and now owns the platform relationship.

Multiply this across reputation management providers, revenue cycle management firms, business intelligence tools, and other software categories. Each vendor acts as a sales force, driving practices onto Sikka’s platform. The company adds “20 to 25 new practices a day,” Vijay notes, with essentially zero marketing spend.

The Operational Efficiency Model

How does a 45-person team support 45,000 practices? The answer lies in automation and infrastructure design:

Self-service onboarding: “The doctor signs the C. AI paperwork, business associate agreements, and then starts to get that service.” The process is standardized and automated. No sales calls, no custom demos, no negotiated contracts.

Infrastructure that scales: Building connections to 450 practice management systems was expensive. But once built, adding the 45,001st customer costs nothing. The infrastructure handles it automatically.

Partner-driven support: When customers have problems with specific integrations, partners provide first-line support. Sikka maintains the infrastructure; partners handle customer-specific issues.

Platform stability: Processing a billion transactions daily with 150 million patients on the platform requires rock-solid infrastructure. But once that infrastructure exists, it runs largely autonomously. “We have 150 million patients on our platform,” Vijay explains, highlighting the scale achieved with minimal team size.

Diverse, efficient team: “Our average age of team members is actually 15 to 20 years below the average age of where, you know, where Silicon Valley technology companies are,” Vijay notes. Younger teams often mean lower compensation costs, though Sikka’s appeal comes from impact: “The company is not a giant in the sense that you lose your sense of identity, you still understand how to run how the business works.”

Each team member sees their direct impact on millions of patients and thousands of practices. That visibility creates ownership and efficiency that large organizations struggle to maintain.

The Expansion Revenue Mechanism

The 110% net dollar retention reveals another crucial element: existing customers naturally expand their spending without additional sales effort.

When a practice signs onto Sikka’s platform through one partner (say, a payment processor), they’re now visible in Sikka’s marketplace. Other partners can offer additional services: reputation management, business analytics, insurance verification, revenue cycle management.

Each additional service generates incremental revenue for Sikka. The practice makes one integration decision—connecting to Sikka’s platform—then can access multiple services through that single connection. This is the power of platform thinking applied to distribution.

The marketplace model means expansion revenue happens through partner activity, not through Sikka’s sales team upselling. Partners drive expansion because they’re all trying to reach practices through Sikka’s infrastructure.

The Profitability While Growing Paradox

“The company is growing at around 40 to 45% plus. We are EBITDA positive,” Vijay shares.

This combination—rapid growth plus profitability—seems impossible in traditional SaaS. Companies choose: grow fast and burn cash, or achieve profitability by slowing growth. The Rule of 40 suggests growth rate plus profit margin should exceed 40%. Sikka exceeds this easily.

At 45% growth and EBITDA positive (let’s conservatively assume 10% EBITDA margin), Sikka posts a Rule of 40 score of 55+. That puts them in the top decile of public SaaS companies, achieved with 45 employees.

The explanation: embedded distribution means growth doesn’t require proportional cost increases. Adding 1,000 new practices doesn’t mean hiring 10 more sales reps, running expensive marketing campaigns, or building custom integrations. The infrastructure already exists. Partners drive the growth. Costs stay flat while revenue scales.

The Compounding Advantage

The most powerful aspect of this model is how advantages compound over time:

More practices = more attractive platform: As Sikka approaches 45,000 practices, partners have even more reason to integrate. Network effects strengthen the moat.

More partners = more customer acquisition: Each new partner category (insurance verification, patient communication, etc.) becomes another distribution channel acquiring customers for Sikka.

More data = better AI: With 150 million patients and a billion daily transactions, Sikka trains AI models that competitors cannot replicate. The data moat reinforces the infrastructure moat.

More efficient operations = better margins: As the team learns to support more practices with the same headcount, gross margins expand and profitability increases.

Traditional sales models face diseconomies of scale—it gets harder to maintain growth as you saturate markets. Embedded distribution creates economies of scale—it gets easier to grow as the platform strengthens.

The Replication Framework

Can other companies achieve similar economics? The conditions must align:

You need infrastructure that multiple vendor types require. Sikka connected to 450 practice management systems. That infrastructure value was obvious to every vendor trying to reach practices.

You need a fragmented market where traditional sales don’t work. If direct sales were viable, partners wouldn’t need your infrastructure badly enough to bring you customers.

You need multiple partner categories targeting the same customers. Sikka has payments, reputation management, revenue cycle management, and more—all needing the same infrastructure.

You need the patience to build infrastructure before monetizing distribution. Sikka spent 10 years building connections before fully leveraging the platform model.

When these conditions exist, embedded distribution transforms unit economics from impossible to inevitable. One thousand customers per employee stops being a dream and becomes simply how infrastructure platforms scale.