TA Ventures invested in the US Walnut – BNPL for the healthcare world

April 9, 2021

TA Ventures participated in a Walnut $3.6M seed round alongside Gradient Ventures, Afore Capital, 2048 Ventures, Supernode Ventures, Polymath Capital, Tack Ventures, Awesome People Ventures, Newark Ventures, NKM Capital.  The company is also a part of Plaid’s inaugural accelerator.

Healthcare insurance only covers a subset of conditions in the United States. For the uninsured and insured alike, innovative ways of managing big bills are in high demand. Walnut, founded by Roshan Patel, uses a “buy now, pay later” model to help patients pay for healthcare over a period of time, instead of in one $3,000 chunk. Walnut works with healthcare providers so that a patient’s bill can be paid back through $100-a-month increments for 30 months, instead of one aggressive credit card swipe.

“We at TA Ventures strongly believe in the space, healthcare should be democratized for everyone despite the credit score. Walnut makes healthcare affordable for most Americans. Now, 60% of the US population cannot cover a single $400 in case of emergency. At the same time, hospitals and general practitioners lose tons of money because of the bad debt. With 0% interest buy now – pay later offering, patients are good to split bills and feel comfortable paying for medical services (planned in advance or due to unexpected cases). We’re happy to join forces together with best-in-class VCs like Gradient Ventures (Google), Lightspeed, Afore, 2048 Ventures, and others,” says TA Ventures Partner, Oleg Malenkov.

The startup doesn’t charge any interest or fees to consumers. Walnut is charging healthcare providers a percentage of each sale or transaction. If a provider’s collection rate for an out-of-pocket is 50%, Walnut would go to them and say “give us a 40% discount, and we’ll guarantee the cash for you upfront.” The startup will take the risk, and then the provider is able to make 60% of the collection rate.

Ideally, a provider would want to get 100% of payments they are owed, but in a real world a large number of bills go unpaid due to bankruptcies or a default on payments. As a result, the average collections rate for hospitals out of pocket is less than 20%. And Walnut can offer at least some stable upfront cash to hospitals, even if it ends up being 60% of overall bills versus 100%.

The startup is starting by working with small private practices of one to five physicians that focus on specialties like dentistry, dermatology, and fertility. Walnut’s two biggest customer groups are the uninsured (people who have lost their jobs from COVID-19), and consumers who have high deductible plans.