Just to give a start of an introduction, I'm Charles MacBain. I'm the CEO of Nordhealth. I started my career in consulting, where I worked with quite a few clinics and hospitals, and I was exposed to the state of EHRs and practice management softwares. That was where my first interest in the area started, given that these softwares were causing a lot of pain to the practitioners in the clinic and the healthcare professionals. As a result, I've always had in the back of my mind that this has been an area which needs disruption. Right? After consulting, I went to work at a private equity fund called Promus Capital, based in Switzerland. Thereafter, I went to Harvard Business School, where I learned about the search fund model, and upon graduation, I searched for a company in this practice management software space.
Decided to focus first on veterinary, given that it's the area of the healthcare which is least regulated, then therapy, which is the second least regulated area. After a year of searching, I ran across Nordhealth, based in Helsinki. We've acquired the company in November of 2018, and it's been quite a journey ever since. Valter, do you want to introduce yourself?
Thank you, Charles. Good morning, everyone. My name is Valter Pasanen. I'm the CFO of Nordhealth. I joined Nordhealth shortly after Charles had joined. Before that, I was working in various financial roles, six years also in Germany, most recently at Eltel, that's listed on the NASDAQ in Stockholm. Eltel was, at that time looking to consolidate the German market, and I was responsible for acquisitions and integration there. At the most recent role I had there was CFO for Eltel Germany, and before getting the amazing opportunity to join this company two and a half years ago.
Thanks, Valter. Want to start off with our vision. What are we trying to do? We're trying to build software tools that help empower healthcare professionals to save time so they can focus on what matters most, right? Delivering great care, great experiences, and growing their business. What is Nordhealth? Nordhealth is one of the leading Nordic healthcare SaaS company. It was founded in 2001. We develop electronic health records and practice management softwares in currently two attractive healthcare niches of veterinary and therapy. In addition to developing our own, we also acquire electronic health record and practice management software providers to help us accelerate our interest into new markets. By new markets, I mean new geographies or new specialties. To date, we've been able to successfully acquire and integrate over eight acquisitions.
We've got two core products currently, which all of our veterinary and therapy clients will in the end move to. One is Provet Cloud for the veterinary market, and second is Diarium for the therapy market. Today, we've got around 230 employees working to design, develop, implement, support, and sell our products. This year, we're targeting EUR 23 million-EUR 25 million of ARR by year-end 2021. The reason we IPO'd the company in June of this year is because we saw that there's a window of five to seven years, a window of opportunity to capture these clinics as they're shifting from legacy on-premise or hosted software to cloud-based software. We want to be able to use those proceeds to accelerate our growth through a combination of M&A and organic growth, as we've done in the past.
If we think about our business today, the ARR, annual recurring revenue, splits by segment is roughly half veterinary and half therapy. A small part of the incubator where we create new add-on products that we upsell then to both our veterinary and therapy customers. In terms of geography, just over half of our customers come from Norway, following the acquisition of Aspit. A 24% come from Finland, 12% come from Sweden. The rest are spread out to the other 22 certain countries. What are our products? The core of the product is the electronic health record software. Right? Those are specific to veterinary. We've got one of the world leading positions in cloud software. Also physiotherapists, occupational speech therapists, and psychotherapists. Over time, we will look to expand beyond those.
Attached to that electronic record software, fully unified, is a practice management software, which enables our users to manage the appointments in their clinic or hospital, right. Schedule shifts, allow customers of those clinics to book online, right. Allow them to communicate via SMS or text messages in a unified way, or manage their inventory, and also do full invoicing. In addition, we've also created something called Nordhealth Pay, which enables our clinics to be able to add fully integrated payments to the solution. Right. They're able to pay in-clinic with the terminals that we provide, do online payments, do recurring payments, and also pay by email or SMS link. This is all supported by our integrations. Here, we're a bit different than some of our competitors.
We are an open system, and we'll continue to be an open system. Open to many third parties to be able to build and integrate with our products. We're not going to be the best at every single part, right? But with our third-party partners to integrate with us, we can be, right? We've got a lot of different integration, some that we do ourselves and some that we actually you have third parties do for us. Telemedicine, for example, we've got our own solution for telemedicine, called VV Health, that we integrate. For imaging, right? We integrate with all the different X-ray machines, MRI machines, CT scans, and so on, right? Now, in the accounting side, we integrate all the local accounting providers, right. Because all the different clinics use different local accounting providers.
All the local wholesalers, right, to make sure you can order directly from the software, and when the order is received, you can easily add those orders to your stock. Insurance companies. There's a growing amount of insurance in veterinary and in therapy. There's a lot of different insurances, so we integrate directly with them to make sure that claims are processed. Lastly is the lab, and there are two types where we integrate with local labs or what we call in-clinic labs for blood tests and so on. Second, we integrate with third-party external labs as well, right, where you have to send out the blood samples or tissue samples to a third party. And so, that's the core part. Some of our enterprise customers go even further.
We've got an open API, which enables some of our enterprise customers to build apps on top of our software. We've got many customers that are building customer mobile apps or some building AI tools for diagnoses. There's very exciting things that are happening beyond and that are enabled by our software. That's been around. Now, a little bit about the company updates in Q2. So, let's start with the KPIs right? A 89% of our revenue is recurring. That's the first thing, right? Second, from the first half of 2020 to the first half of 2021, our ARR grew by 124%, of which 36% was organic ARR growth. And that's driven by two factors. One, organic net retention was 118%. Two, we had 18% coming from organic customer recruitments.
Again, very low churn rate of 3%, right, which entails that people stay with us these 33+ years. A little bit about what happened operationally. First, we made a lot of new hires, right? But I just want to highlight a few key new hires that we've made. First, we've hired three new country managers. To understand the importance of this, the way we run our business is very localized because the country managers and their teams make the majority of the decisions for their markets, and that's what enables us to scale. The country managers are really key position for us. We hired one for the U.S., one for the U.K., and one for Spain.
In the U.S., we hired Chris, and he was previously working at a software company selling into veterinary clinics, and he was able to ramp up sales at that company from 0 to 1,200 + clinics in five years. Second, we hired Scott, who's got about 12 years of experience in U.K. B2B software with a particular focus on enterprise sales and customer success. Third, in Spain, we recently hired Jordi, who joined us actually at the beginning this week as country manager, and he was also selling into vet practices with two companies which had startup operations. Quite an entrepreneur as well. In addition to that, we've also promoted two of our own internal employees in the therapy business unit to country managers in Finland and in Norway. Next is customer wins.
We won two big corporate chains in the U.S., right, which is proving that we're getting more and more localized for that market, and we're competing better with the incumbents there. We also sadly lost one to a competition. The rough sort of ARR from those two customer gains is roughly $250,000. Then, we also won a corporate chain in Spain, and we won a U.K. university tender. New market entries, right. As we said before, right, there are two ways that we go into new markets, right. One is organically, and second is through acquisitions. We've actually entered two new markets through acquisition. The first is the Norwegian psychotherapy and physiotherapy market with the acquisition of Aspit. And second is we entered the Danish veterinary market with the acquisition of Novasoft.
For those two, we've got the same strategy as we have had in the past, right? Understand, make sure their employees and customers feel safe, do a gap analysis to figure out what great features they have in their software that we should bring into our software, and the third step is the migration, where we bring them all on one platform. Lastly, we also launched a new product. We launched what's Nordhealth Pay, which is our unified omnichannel payment solution that allows clinics to do in-clinic and online payments. Now, maybe, Valter, do you want to go through the financial updates?
Thank you, Charles. All right, let's dig a bit deeper into that ARR growth we saw earlier. So, i n Q2 and Q2 2020, we had an ARR of EUR 10 million. We then signed new ARR with EUR 1.8 million, resulting in the 18% new organic customer recruitment process. Then, had net upsell of EUR 2.1 million and a churn of EUR 0.3 million, so 3% there. In total, those two together, the net retention rate of 118%, resulting in the 36% organic growth rate, organically leading us to EUR 13.6 million by the end of Q2 2021. When we then add on top the acquisitions, we closed in the second quarter of 2021, we then ended the year at EUR 22.4 million ARR. And then, look at the quarter-to-quarter development, we in the end of Q1 had EUR 12.7 million of ARR.
We had organic growth of 7%, leading again to EUR 13.6 million in the end of Q2 organically, and again, the EUR 8.8 million getting to EUR 22.4 million by the end of Q2. So, 76% growth in ARR in one quarter. And to go through some of the reported financials. So for relevance, we have adjusted revenues for the divested consulting business, which we divested in the last quarter of 2020. These were basically customers that mainly didn't have any relation to our veterinarian therapy products, and that's why they were also not part of the IPO ARR in that. To understand the underlying growth rate of our continuing business, we have adjusted for those. The adjustments in the first half of 2020 are EUR 50,000, so it's mainly about the 2020 numbers, where we adjusted roughly for EUR 800,000 in revenues.
When we look at the adjusted revenues, they grew year-over-year in the first half for 52%. Recurring revenues grew by 53% year-over-year in the first half. When we look at the EBITDA, we have, for the first half of 2021, taken out the IPO and M&A cost and adjusted for those to understand the underlying comparable EBITDA. So that was at EUR 1.9 million in the first half of 2021, and showed a growth rate year-over-year of 56%. Then, to look a little bit on the quarter-over-quarter development for the same numbers. so them quarter-over-quarter from Q2 2020 to 2021, we saw an adjusted revenue growth of 83%, so quite significantly higher, and recurring revenue growth of 73%. The adjusted EBITDA also grew from EUR 0.6 million to EUR 1.1 million, showing 74% growth rate there.
A chart that perhaps you might know from the IPO process, we continued here for the first half of 2021. We showed the scaling operations and the positive EBITDA we've had. Now we've again adjusted for the IPO and M&A cost only there in the first half of 2021. So we then, when we then look at that, we see that we had an adjusted EBITDA of EUR 1.9 million as mentioned, and adjusted free cash flow of EUR 3.1 million. So, still generating very positive cash flow, which we're of course, happy to see, even though it's not our main focus as we are mainly focusing on growing and grabbing as much of that ARR as possible. Then, going through the P&L. We provided a bit more detail also in the Q2 report, but shortly, some of the main items here.
So it's important to note that these reported financials now include our acquisitions from the date of closing, Aspit from the start of June and Novasoft from the start of April. The total revenues were at EUR 8.1 million, growing at 41% year-over-year. Recurring revenues in the reported revenues were up 49%, ending at EUR 7.2 million in the first half. And adjusted EBITDA, again , as mentioned, was EUR 1.9 million, something 24%. When we look at the first half of 2020, it was actually at 22%, so there's actually a slight increase in EBITDA year-over-year. Then, a quick look at the balance sheet. The significant changes there are in the total non-current assets, a big increase in goodwill resulting from the acquisitions closed in the second quarter. In the intangible assets, we see capitalization of product development expenses.
And then, in the current assets, we see, of course, a big increase in cash, which is resulting from the private placement and subsequent listing to Euronext Growth. On the other side of the balance sheet, we see in the liabilities that most interest-bearing liabilities were repaid in the second quarter. We reduced those by EUR 1.7 million. An then, also we see that advances received from customers grew quite significantly. As you might remember from the IPO process, all of our customers pay us in advance, pretty much, and some of them pay a half year, some of them their quarter. That increased quite a bit and the big increase there coming also from Aspit. Equity, of course, increased a lot also due to the private placement and listing to Euronext Growth. Then, going through the cash flow statement.
First of all, net cash flow from operations positive at EUR 2.3 million, driven by net working capital. When we adjust also for the exceptional IPO and M&A cost, we would have had a EUR 4.7 million net positive cash flow. Then, looking at the investment impact, the net cash flow from investments was at EUR -42 million if you round up, and EUR 40 million of that coming from the acquisitions. And in the financing items, we can see the change in debt at EUR 1.6 million. The interest-bearing debt we repaid was EUR 1.7 million. There was some positive impact there as well. Totally at EUR -1.6 million. The new equity received, already mentioned.
An then, we also had a payment of dividend in pre-IPO in the spring, in order for the majority owner and CEO to repay some of the debt that he had originally used to purchase the company back in 2018. So net cash flow from financing, plus, EUR 112 million, ending at a cash balance of EUR 76.4 million in the end of Q2.
Thanks, Valter. Before we close, I just want to summarize a bit. We've been quite busy over the first half of the year, right? Doing a private placement, subsequent listing to raise EUR 120 million . We've got new customer wins, the acquisition of Novasoft, the acquisition of Aspit, and also the integrations that goes with those. However, we do also have some challenges, right? A couple of challenges to mention. One of the big ones is that, as you saw, we've got our increasing free cash flow, and this is not what we're looking for, actually. We're looking to grow fast, and growing fast means recruiting more and more great people. And that's always a challenge, especially in this market now, to recruit great product team members like designers, developers, right, product managers.
Also recruiting local team members, right, in Vet and Therapy, which are two very busy industries at the moment. We're working very hard to be able to recruit new people, and that's probably one of the biggest bottlenecks that we have. We've got great ideas and lots of projects, right? We just want to make sure that they're well-resourced, especially given that there's a ramp-up period. For example, implementation can be three-to-six months. We have to ramp that person up to be able to do them independently. So, that's one of the big challenges that we have. Overall, we're very happy with the performance in this first half, and I want to thank our employees who've done a wonderful job and worked really hard over this first half to accomplish these amazing feats. Thank you.
Next, we'll update you again for the Q3 2021 updates on the 30th of November 2021. If there's any questions, please feel free to ask. The way to ask questions probably is you can use the chat, and I'll repeat the questions, what you've added into the chat, and then I will answer them. You can find the chat icon at the bottom. Okay.
All right. I think we have one question, Charles.
One question. Here we go. So, why did you lose a U.S. corporate customer to a competitor? Who won the contract? That's the first question. On this one, we lost a U.S. corporate chain as one of their requirements for selecting a provider was to get a big investment, a controlling stake in that provider. They decided to go with Rhapsody, which was a local startup that they could get a controlled investment in. That's the reason. For us, what's wonderful about that is that we had to discuss during the IPO that this happened as well with Vetspire. There were basically two main cloud-based competitors that were independent at that time, right? There was Vetspire, which was acquired by a corporate chain fully, and now there's Rhapsody, which has been invested in by another corporate chain.
As a result, a lot of different chains in the U.S. who were using that product are now a bit afraid in coming to us because they don't want their competitors having access to their data. Hope that answers the question. The second is, what is your approximate win ratio for U.S. corporate chain tenders? It's hard to say exactly based on very few data points, right? The majority are not tenders, but overall, we've probably won over half of those that we've gone after. But again, the sample size is probably around four. Three or four. It's not a huge amount. Hope that answers the question. Any other questions? We've got a question here. How is the ramp-up of the payments module? Payments is a core part of our future strategy to be able to help out receptionists improve their workflow.
Payments is also a core part of the clinic's operations. We have currently a pilot ongoing in Finland] for a few weeks now, and we've rolled out quite a few locations for a corporate chain in Spain as well. For now, the initial part is going well. We are being slowed down, however, somewhat by the chip shortage in that the availability of payment terminals is quite limited. We're working with Adyen on that one. We're very happy with the progress so far and the product's working quite well actually with customers, we're quite happy. We got another question, can you give us more color on the contract wins in Spain and U.K.? Yeah, sure. In Spain, there is a customer which owns quite a few hospitals, referral hospitals, much bigger hospitals.
We actually work with another company that the end company, HKP, owns. We had taken over their first opinion clinics and we're now taking over their referral hospitals, which they bought. That's one in Spain. In Spain, we've had good relations with those corporate chains, and we're gaining the trust of the market there. And say, a market where the NPS scores are quite high as well. The second is the U.K., where we won [University of Liverpool]. We're currently implementing [University of Liverpool]. We really like this university strategy we had mentioned in the IPO because it's the place where all the new generation of vets are trained. If they can be trained on our system, then they will go back to clinics which are using a legacy system that looks like Windows 95, right? They can be the agent of change in that clinic.
Hope that answers the question. We got another question, how does the M&A pipeline look now? We try not to discuss too much the M&A pipeline, but the strategy is still the same for M&A, is that we are continually looking at targets in the veterinary and therapy PMS space, as well as targets that could provide us with add-on software that we could then upsell to our two different veterinary and therapy clients. In addition, we are looking at some outside of those specialties to create new specialties. But we try not to give too much information on M&A, given that you never know what could happen until the deal is signed. I prefer not to jinx it on these things. We are confident that acquisition will continue over time. We did acquire two big companies in the first half of this year.
One big company and one smaller one, and we want to make sure that we've got the resources and time to be able to properly integrate those. Yeah. Any other questions? Good. If there's no other questions, well. Oh, sorry, we have one. What are some of the things that you're doing to help hiring people? Well, there's a couple things. One is the big thing was the rebranding as part of the IPO. We've seen the quality of candidates increase a lot for that. The second thing that we're doing is that we've invested more in HR, right, to be able to help us source candidates outbound, right? The third is the key hires for local hires were those country managers who have local networks in those countries.
On the product side, we've got many jobs open, rights, and we are looking to pay slightly above average for developers and designers. And th e reason why it's taking us time is that we have raised the bar as well for hiring. We want great people to join us for many, many years, and so we don't want to rush it. I could rush and fill all those positions tomorrow, but we really want to make sure that we get people that have spectacular ability and also fit in our culture well. Those two things are important because, again, in most of these positions, the ramp-up time is quite significant because a designer who just starts with no veterinary therapy experience will have to have time to understand the workflows of a reception in a vet clinic or a therapy clinic and so on, right?
Especially the medical workflows, which are more complex. For example, in a referral hospital for veterinary. But the big thing we're doing is shifting to outbound. One of the position we have open is a recruiter, a corporate recruiter for products, which will hopefully help us be able to do more targeted outbound. Okay. We'll just wait maybe a couple seconds to see if there's any other questions. Otherwise, doesn't seem there's more questions. Thank you very much for everyone for attending, I think. Again, thank you for our employees for a wonderful time. We look forward to updating you again for the Q3 results on the November 30th.
Thank you.
Thank you for your time. Bye.
Bye.