How Do You Build a 5-Star Healthcare Startup? Hint: Solve Payments at Point-of-Care
Hoping you’re all off to a great week!
I’m excited to share over at Kingscrowd we’re very close to launching our second newsletter called Monday Memo that includes a whole host of stuff — from new deals and staff picks to founder profiles and market trends!
Better yet, it’s free! All you have to do is create an account here.
Brief: Asserta Health has built a healthcare payment utility that helps people with insurance pay for services at the time healthcare is delivered without the need for claims later. The payment infrastructure of Asserta Health, medEcash, enables patients and employers to know the price of healthcare in advance and pay the providers in real time.
Key People: CEO Korb Matosich (oversaw multiple businesses at UnitedHealth Group, former CEO of AAPC), Chief Medical Officer Lisa Behnke, MD (12 years of experience at UnitedHealth Group), CTO David Hersom
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View on Republic: Term Sheet
Security Type: Equity - Common
Amount Raised: $153,241
Minimum Investment: $246.45
Here's what I like: As much as 25% of all healthcare costs come from administrative work. The amount of money wasted is absurd, and if you’ve ever “negotiated” your payment plan for a procedure, you already know it goes something like an episode of Pawn Stars.
Asserta is basically enabling patients to pay for medical services like they do for literally everything else they purchase. It’s as simple as that.
I also think this team is phenomenal. In most startups you look for people with a Goldilocks amount of industry experience -- enough that they know what they're doing, but not so much that they struggle to be disruptive. But in insurance and healthcare, it tends to be the opposite. Founders need enough reps to deeply understand why the system is broken. The Asserta Health team brings that level of expertise.
Last but not least, I love the price at just over $22 million. Given the total addressable market (TAM) and team, this is a great value pick IMO.
Here's what I don't love: There is literally only one thing that I struggle with and that is how Asserta differentiates over time. By all accounts the tech is strong, and the company has real revenue -- $2 million in 2021 revenue after processing more than $40 million in transactions.
The reality is with any market opportunity this big, there will be a million competitors. And it's impossible to predict how our opaque medical system will choose a particular product over another. My limited sense is that much of it is driven by networking and speed to market. And there's very little stopping a beast like Stripe from entering.
Who should invest and why: As was the case with my investment in Elemeno Health a while back, healthcare ain’t my bag, but my personal experience as an annoyed patient (victim??) was enough reason for me to put in. The same applies here with Asserta -- if you’ve ever been on the wrong end of a billing dispute with the doctor's office, I’d urge you to consider this deal.
Beyond that, the team is as good as it gets, there's real revenue, and the price (and minimum) is incredibly fair. This deal is actually as close to a no-brainer as you’ll see online!
As always, startup investing is super high-risk, and anything can happen. Don't invest anything you can't afford to lose.
Invest in Asserta Health here 👉 Term Sheet
DM’s open on Twitter & IG 🤳 @kitun.