A Gilbert-based financial technology startup that makes a payment platform for health care providers plans to use a new $5.5 million funding infusion to push into new markets, reach new clients and enhance its technology.
PayGround’s latest funding round comes a little over a year after it raised $4 million in 2021. This time around, FCA Venture Partners and Lewis & Clark Ventures led the way, with existing investors, Triventures and angel investors also contributing.
The new funding — which will be included in PayGround's series A round that is currently underway and will close in a few months — is a testament to the rapid growth the company has been experiencing since it was founded in 2018. Just in the past two years, the company said, it has grown its annual revenue by more than 725%.
"We're excited to add highly credible health care investors that have strong relationships with health systems like FCA Venture Partners and Lewis & Clark Ventures to our investment team," PayGround CEO Drew Mercer said in a statement. "This investment round enables us to expand our commercial team to sell into the acute markets and build awareness with direct-to-consumer marketing campaigns. It also allows us to invest in our platform and develop more innovative features that change the way health care payments are made."
The company’s headcount stands at 25, Mercer said. It currently has a handful of jobs advertised on its careers page.
PayGround's mission is to simplify the process of paying medical bills by giving patients a single app to pay all their bills from, provided their doctors are signed up to use the platform. The company launched its mobile app at the end of last year. Patients can take pictures of their bills, select credit, debit, HSA and FSA cards as payment methods and pay on the app.
Digital wallet for patients
The startup said health care providers are benefiting as well, seeing a 23% increase in collections within the first 90 days and a decrease in invoice time in accounts receivable by an average of 6.7 days.
Currently the company had more than 450 customers across the U.S., Mercer said.
Helen Ciesielski, principal at Lewis & Clark Ventures, highlighted the platform’s two-way benefit as a key aspect of PayGround’s attractiveness.
"PayGround's technology platform is a unique combination of a value-added payment processor for health care providers and a digital wallet for patients. This creates a win-win for providers and patients," Ciesielski said in a statement. "Providers can increase the amount collected, decrease collection expenses and delight their patients by allowing them to pay by ACH, credit card, HSA/FSA or financing all in one seamless experience."
Todd Johnson, partner at FCA Venture Partners, said his team is interested in health care companies that combine breakthrough products with a sustainable business model.
"PayGround fits that mold,” Johnson said in a statement. “Their experienced leadership team has envisioned the future of health care payments."
PayGround was selected by AZ Inno as one of the Valley’s 10 Startups to Watch poised for a breakthrough year in 2022. The company was also one of 10 named to StartupAZ’s 2021 Collective Growth Cohort, meaning company executives were able over the past year to come together with their peers at other startups to share tips, hardships and ideas as part of the program.
