The convergence of healthcare and fintech is rapidly emerging as a niche growth segment and investors are eager to fuel its rise.
Simplee, an innovator in improving the customer experience for healthcare payment and billing, today announced a $20 million round of funding led by Social Capital, along with existing investors 83 North and Heritage Group. New investor American Express Ventures also took part. The funding will be used to double its staff of 50 employees based in the U.S. and Israel over the next 18 months. It will also expand deployments of its platform in hospitals, a spokeswoman for Simplee said.
An infusion from the strategic investment group within American Express, which pumps funding into innovative startups such as global identity verification provider Trulioo, Internet-based grocery delivery service Instacart, and global social CRM company Capillary Technologies, signals a significant boost for Simplee.
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“The patient financial experience is proving a brand differentiation source for healthcare providers in the rising consumer battle for patients,” said Simplee CEO and co-founder Tomer Shoval. “We are thrilled to have support of investors like Social Capital and American Express Ventures as we define the financial technology future of healthcare.”
Competitors in this burgeoning healthcare fintech space include Change Healthcare, which rebranded the fourth quarter of 2015 from Emdeon, RelayHealth, InstaMed, and WellnessFX. Each of these companies offers a variety of products and services, but none compete evenly in this fragmented market, making it difficult to gauge which company dominates. There are likely to be more entrants eager to meet the demand to streamline and better manage the $330 billion in annual out-of-pocket medical spend, which eclipses online retail spending.
The Simplee Financial Engagement software platform brings together hospital and physician estimates, statements, payments, and credit. Since launching its platform in 2013, Simplee serves nearly 900 hospitals and physician groups, and 5 million patients across the U.S., representing more than $1 billion in annual payments.
“Simplee has developed a smart technology platform that reduces the friction in healthcare payments, an increasingly complex ecosystem to navigate,” said Harshul Sanghi, a managing partner at American Express Ventures. “We’re pleased to invest in solutions that provide a more seamless experience for patients and providers alike.”
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There’s likely to be more investment in companies like Simplee and consolidation as the industry evolves.
The global healthcare IT market ballooned by nearly 63% in the last five years, and is expected to swell to $228.7 billion by 2020, according to a recent Markets and Markets report. M&A activity rocketed to a new global high with nearly $5 trillion in deals in 2015, according to propelled by consolidation in the healthcare sector.