Tag: 7wire Ventures

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PayZen secures $15M Series A for ‘care now, pay later’ healthcare platform

Healthcare costs in the U.S. are steadily rising, and the share patients must pay out-of-pocket has increased in tandem. Nearly one in three American households have delayed medical care due to its cost, per a 2019 Gallup poll.  

Payzen, a healthcare fintech startup, raised $15 million in Series A funding for its solution that leverages artificial intelligence to underwrite patients’ medical debt, allowing them to access care and pay for it over time in installments. 

SignalFire led the round, with participation from new investors Link Ventures and 7WireVentures alongside existing investors Viola Ventures and Picus Capital. The company last raised $5 million in seed funding in early 2021, and the Series A brings its total amount raised to $20 million.

PayZen’s “care now, pay later” solution is available to all patients, who can pay for procedures over time with no fees or interest. The artificial intelligence technology underlying the platform allows hospitals to leverage patient data to determine payment plans specific to each patient while keeping administrative costs low.

PayZen was founded in 2018 by three fintech veterans, Ariel Rosenthal, and Itzik Cohen, and Tobias Mezger. Cohen, who now serves as PayZen’s CEO, previously served as chief executive at consumer debt fintech Beyond Finance. 

Out-of-pocket costs for patients doubled in the past decade and are projected to double again in the next decade, Cohen told TechCrunch in an interview.

“Because [the founding team] was from fintech and we watched, for example, what “buy now pay later” could do for for e-commerce, where people could afford more high-ticket items because of innovation and underwriting an expansion of credit, we thought to ourselves, medical providers are also having a hard time, because they need to collect more and more of the bill from the patient. That puts them in a bad situation as well,” Cohen said. 

Because patients using PayZen’s plans are not charged interest, healthcare providers keep these costs on their own books. Cohen said that reversing the underwriting process by prioritizing plans that work for patients and their individual financial situations has increased payment adherence.

Philadelphia-based Geisinger Hospital saw payment collection increase by 23% after implementing PayZen, the company says. Cohen added that the average operating margin for most major health systems in the U.S. is quite low, at 1 percent, and that the industry has been hit by staffing shortages.

“Any change in the market conditions will drive them to losses, quite frankly. They’re using this time now to optimize, to invest in technology that will automate a lot of their processes,” Cohen said.

The startup, less than a year old, expects to announce a significant product expansion in January, he added. 

To keep up with growth, Cohen said he expects to grow PayZen’s 35-person team to around 100 employees by the end of next year. 

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Babylon Health leads a $30M Series B in US health kiosk operator, Higi

UK-based AI chatbot Babylon Health — which last year raised $550M at a $2BN+ valuation — has led a $30M Series B in US-based Higi, which owns and operates 10,000+ FDA-cleared health kiosks.

Higi, which was founded back in 2012 per Crunchbase, has built out a nationwide network of “health stations” located at retail locations such as groceries and pharmacies within 5 miles of 73% of the US population, where users can check their blood pressure, pulse, weight and BMI for free.

It also offers apps for users to track health measurements and input fitness data — giving it access to rich data streams that can inform healthcare workflows for its partners.

Its privacy policy notes that it may combine users personal data with other sources of their data it obtains, and may ‘anonymize and aggregate’ user data to use the health information for any purpose — illustrating why a data-hungry AI startup like Babylon sees valuable strategic potential in ploughing dollars into Higi, as it seeks to build out its own US business.

Higi says its kiosks have been used by 62M people in North America to date, conducting more than 372M biometric tests. Babylon’s investment in the company will go on supporting the expansion and “enhancement” of this network, including further development of digital capabilities, assessments and programs, the pair said today.

Babylon is not disclosing the size of its strategic investment in Higi’s Series B. Existing investors from the latter’s Series A also participated, including 7Wire Ventures, Flare Capital Partners, Jumpstart Capital, Rush University Medical Center for Health and William Wrigley Jr.

A spokeswoman for Babylon said it’s the first official US investment it has made but said it’s hopeful that “more strategic investments and partnerships” will follow to help extend its reach in the US.

“By offering a bundled care solution that combines Babylon’s symptom checking and remote digital health tools with Higi’s consumer reach and assessment capabilities, the companies will together be able to offer a more end-to-end solution to meet the needs of payers, providers and retailers on the front lines of care delivery,” the pair said in a press release.

“Higi’s Smart Health Stations are already located in thousands of towns across North America, and by integrating Babylon’s digital first healthcare services into Higi’s station experience, we can make the healthcare services that people need that much more accessible and affordable across North America,” said Babylon CEO and founder Dr Ali Parsa in a statement.

He goes on to talk up the tie-up as supporting “the everyday support of a person’s health and wellbeing” — claiming it places “greater emphasis on prevention and tackling issues earlier [by] helping millions of people proactively tend to their health and connect them to the information and medical support they need”.

“With Babylon as one of our investors and strategic partners, we are beautifully positioned to drive real change in the delivery of primary care across the U.S.,” added Higi CEO Jeff Bennett in another supporting statement. “Our commitment is to provide consumers, anywhere they might be in, with smart medical tools like unique diagnostics to support their health and wellbeing.

“Our partnership with Babylon broadens our clinical capabilities and ability to support consumers with acute medical problems or those with chronic conditions like hypertension, diabetes, and obesity, thereby allowing us to better meet the needs of payors, retailers and health systems. The U.S. healthcare system has many virtues, but it is simply too expensive and hard for consumers to access care. Together, we will get patients to the right care, faster and far less expensively.”

Babylon begun a push into the US market this year, launching officially on January 1. Currently it provides access to “healthcare services” via its app to members of certain health plans in Missouri, New York and California. Earlier this month, for example, it partnered with Mount Sinai Health Partners to offer an insurance-covered telehealth option for New Yorkers which includes video consultations with physicians.

Last month, Business Insider reported that Babylon had furloughed 5% of its staff in response to the coronavirus pandemic, tapping into a scheme which sees the UK government covering up to 80% of the pay of furloughed workers.

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Applying big data analytics to patient records, OM1 offers insights to hospitals and pharma

OM1, a big-data analytics company for the healthcare industry, has raised $50 million in its latest round of financing to expand its sales and marketing and product development activities as it brings clinical insights to hospitals and big pharma companies alike.

The new financing highlights just how important access to data is in the fight to increase efficiencies and drive down costs in healthcare. Pharmaceutical companies can use the data in their interactions with the Food and Drug Administration to make a case for the utility of certain drugs, while hospitals and physicians use the data to improve treatment by looking at which courses of care produced the best outcomes.

“Clinical outcomes are the most important metric in healthcare,” said Dr. Richard Gliklich, CEO and founder of OM1. “With this funding, OM1 will accelerate our work towards delivering rapid access to real-world outcomes and evidence and with helping our customers apply those data in impactful ways.”

OM1’s latest financing was led by Scale Venture Partners, with participation from existing investors, including General Catalyst (GC), Polaris Partners, and 7wire Ventures.

As a result of the funding, Rory O’Driscoll, a managing director with Scale Venture Partners, has taken a seat on the company’s board of directors.

“AI and data are driving factors in the transformation of many industries,” said O’Driscoll, in a statement. “OM1 is at the forefront of bridging these two in transformative ways in healthcare, and we are excited to be part of the journey to drive the better development of medicine and delivery of care.”

The company focuses on therapeutic areas including chronic conditions like immunology, rheumatology, cardiometabolic disorders, musculoskeletal conditions and particular central nervous system or behavioral health technologies.

Founded in 2015 by Dr. Gliklich when he was working as an executive in residence at General Catalyst, the company’s work also supports Gliklich’s other duties as the principal investigator for a federal effort looking at outcomes measurement and standardization.

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Healthcare-focused venture firms are forming a best practices group for securing health data

Some of the nation’s top healthcare-focused venture capital firms are banding together to form an advisory council with the technology security certification provider, Hitrust, to create best practices for data security for startups developing digital health technologies.

The conversations, spearheaded by the Nashville-based, healthcare-focused investment fund, Frist-Cressey, were designed to accelerate the adoption of digital technologies throughout the healthcare industry by creating best-practices around data security that large healthcare organizations demand before adopting a new service.

“Our service or our software want to be taken nationwide and everybody gets excited and thats’ when you get in front of the Chief security officer’s office and they ask if you’re HiTrust certified,” says Frist-Cressey partner Chris Booker. 

“It makes [startups] more marketable or more viable,” says Daniel Nutkis, the chief executive of Hitrust. “Organizations tend to be reluctant to work with startups… [Our certification] gave venture capital firms a level of comfort and we saw it as an opportunity.. Chris approached us to better develop a program more targeted at early stage companies… so that this becomes an easier program and can make it more wide-scale.”

So far investors including Ascension Ventures, Bain Capital . Ventures, Echo Health Ventures, Frist Cressey Ventures, Andreessen Horowitz, Blue Cross Blue Shield Ventures, Heritage Group, New Enterprise Associates and 7wire Ventures have all signed on to the venture capital advisory council.

For the firms, it’s simply a matter of protecting what is an increasing percentage of capital commitments. Investors have poured $50 billion into healthcare startups, according to data pulled from CB Insights, and nearly $16 billion of those investments were in digital health companies. Meanwhile, early stage startups are increasingly vulnerable to data breaches and lax security practices — failures of oversight that can mean the difference between life and death for early stage startups.

“Data breaches and privacy violations… these things can destroy a company,” says Booker.