San Francisco-based fintech startup PayZen just announced a successful Series B funding round, raising $232 million to expand its artificial intelligence (AI)-driven healthcare affordability platform.
Series B funding is a second major investment round for a growing company. For PayZen, this funding round is crucial to scaling their innovative post-care payment solutions to a broader audience and continuing their growth trajectory.
“This latest round is the next step in our journey to remove financial barriers to care for patients,” said Itzik Cohen, PayZen’s co-founder and CEO. “We are honored to have found partners in both our investors and our health systems network that share the same vision for the future.”
The round was led by New Enterprise Associates (NEA) as well as its existing investors: 7wireVentures, SignalFire, and Viola Ventures. They amassed about $32 million in equity and a $200 million credit warehouse supported by Viola Credit and a “syndicate of insurance companies.”.
The newly secured funds will be used to expand PayZen’s market reach and introduce new AI-driven solutions tailored to patient affordability needs. The company plans to bring its customizable healthcare payment options to a broader audience and continue its rapid growth trajectory.
PayZen, founded in 2019, brands itself as “care now, pay later,” aiming to help patients in the United States with the financial burden of medical expenses. It leverages artificial intelligence and machine learning models to create personalized payment plans, enabling patients to pay their medical bills in interest-free installments over time.
In addition to post-care loans, PayZen recently introduced a pre-care card to address the growing need for patients to pay deposits before scheduling procedures. This card aims to further ease the financial burden on patients by offering flexible payment options.
Cohen previously discussed, in an interview, the state of health plans in the U.S., stating they are increasingly incorporating high-deductible health plans (HDHPs) into their structure. He estimated the deductibles to be growing at a rate of 15% annually. He acknowledges this as a major shift in payment responsibility, creating an unsustainable financial burden for both patients and medical providers.
“How come no one really created a purposely built product to solve the affordability crisis in healthcare in the United States?” said Cohen. “Our mission is to bring financial health to health care.”
Cohen acknowledges that integrating technology into healthcare is challenging. However, he doesn’t see established companies like ClearBalance and Access One as significant competitors, given that they still rely on human-operated call centers. He asserts that their proprietary, integrated solution provides a substantial advantage, as more healthcare systems transition to platforms like Epic’s MyChart.
PayZen’s growth has been impressive, achieving a six-times increase in revenue over the past two years, maintaining 100% customer retention and 132% net retention.
“We have people joining us because of our mission,” Cohen said. “We go to sleep every night knowing that we’re making a good impact on the world.”
