A Gilbert-based financial technology startup is looking to bolster its rapid expansion into health care systems and hospitals with fresh capital.
PayGround announced Nov. 28 that it has closed a $19.7 million series A round led by SixThirty with participation by Rally Ventures, IA Capital Group, FCA Venture Partners and Plug and Play Ventures.
PayGround’s platform streamlines health care payments for providers and patients via its mobile app that manages, tracks and pays medical bills all in one place.
In addition to fueling its expansion into new hospitals, the fresh funds will further enhance PayGround's platform and bolster its sales and marketing team, said Drew Mercer, CEO of PayGround.
“We're going to really put more cowbell to the PayGround platform, so hiring sales, marketing and operations personnel to support our growth,” Mercer said, “and then increasing the feature set of our platform for hospitals, health systems and the payers.”
PayGround’s platform can integrate into providers' electronic medical health record systems to seamlessly collect payments online or onsite, reducing overall costs and simplifying workflow.
“Any person can download our mobile app on iOS or Android app stores for free, and they can pay any medical bill through it,” Mercer said. “Even those doctors that aren't yet on our network. You just take a picture of the bill and we facilitate payment to that provider on your behalf.”
PayGround has grown its annual revenue by more than 560% over the past three years, demonstrating its ability to simplify the healthcare payment process for patients and providers, according to the company.
"Payments, and particularly out-of-pocket payments, continue to be a vexing pain point for healthcare providers and patients,” Andrew Wegrzyn, principal at SixThirty, said in a statement. “With this current round of funding, PayGround will continue to grow as a recognized and trusted partner for providers and patients — modernizing the way healthcare payments are made in the U.S.”
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PayGround’s oversubscribed series A fundraise comes on the heels of subdued venture capital deals nationwide in the third quarter.
An increasing number of startup founders are opting for bridge funding rounds, while venture capital firms are expected to push back fundraising efforts until at least 2024, according to Pitchbook’s most recent Venture Monitor report.
PayGround attributes its successful fundraise to market response of its healthcare platform, which is available for patients nationwide and now servicing hospitals in four states, Mercer said.
“Paying your health care bills is not easy. It's full of friction and the market really is starving for the solution we're providing, I think, plain and simple,” Mercer said. That's why we're able to raise this round in this economic time.”
To date, PayGround has raised a total of $23.7 million in capital. It was selected by AZ Inno as one of the Valley’s 10 Startups to Watch poised for a breakthrough year in 2022.
“Apart from fundraising — which shows the validity of the business, the potential and opportunity that we have — putting revenue on the board and utilization goals are extremely meaningful for us,” Mercer said.
