One year after announcing its Series A round, a buy-now-pay-later provider for health care bills has raised another equity round as well as a line of credit to fuel its growth.
On Tuesday, San Francisco-based PayZen said it raised $20 million in an equity round led by 7wireVentures, bringing its total funding to $40 million including $15 million from a Series A round last year. The company also said it had secured $200 million in a warehouse credit facility provided by Viola Credit, the debt arm of Israeli investment firm Viola Group.
The startup offers health care providers reduced upfront payments for medical bills, and then attempts to collect the full amount from consumers over a longer period of time. Instead of charging patients interest or fees, it pockets the difference.
In a statement, PayZen said that the credit facility from Viola Credit "significantly" expands its existing line of credit, and that the new funding "will accelerate its mission to make personalized, affordable, no-cost payment options available to all Americans, building on its technology lead to become the embedded finance platform of the health care industry."
CEO Itzik Cohen, CTO Ariel Rosenthal and COO Tobias Mezger founded the company in 2019.
Originally from Israel, Cohen was diagnosed with cancer after moving to the U.S. and experienced the shock of ending up with tens of thousands of dollars in medical debt despite having insurance.
“There are many, many things to solve in health care. We're not solving everything. We just started with our knowledge, our capability,” Cohen told me last year. “We can tackle right now something that we think is not going to stop, which is how do we address affordability.”
Around one-fifth of U.S. households could not afford to pay for medical care upfront in 2017, according to the U.S. Census which added a question about medical debt in 2018.
Americans have also been delaying preventative and urgent care treatments, and going into debt at higher rates than patients other wealthy nations as deductibles and co-pays have skyrocketed in private health care plans, according to a Los Angeles Times investigation.
