PayZen Raises $5M To Provide Payment Plans For US Hospital Patients

Israeli-founded patient financing startup PayZen emerged from stealth mode late last week to announce a $5 million seed funding round.

Founded by Itzik Cohen, Tobias Mezger, and Ariel Rosenthal, PayZen is a mission-driven healthcare fintech company that offers AI-powered individualized patient payment plans to manage US hospital costs, paying hospital invoices upfront.

PayZen’s model is unique and applies an embedded finance approach to healthcare to determine a patient’s unique ability to pay. The digital platform integrates into any hospital system and makes the application seamless for both patients and hospital administrators. Patients are approved, offered a zero percent interest payment plan, are never charged fees, and can change their payment schedule online at any time.

The company says its platform is expected to increase collections for hospitals by 50 percent while making healthcare more affordable for patients, especially as COVID-19 continues to take its toll across the US and the world.

Currently, hospitals average payments of just fifteen to thirty cents on the dollar, but once a patient enrolls in the PayZen program, healthcare providers are paid immediately without recourse, the company said.

The company also recently joined forces with Revenue Cycle Management firm RMS and digital health company Vim to deploy its technology platform across a number of healthcare providers and reach hundreds of hospital systems and thousands of patients across the country. PayZen indicated that there has been strong demand as it enrolls patients who haven’t been able to pay their medical bills.

“PayZen addresses a decades-long problem of hospital bills going unpaid due to patients’ inability to pay large lump sum medical invoices,” said Cohen, who serves as PayZen CEO. “We’ve created a business model that does well and good, addressing the challenges experienced both by patients and hospitals when it comes to out-of-pocket expenses.”

Prior to coming out of stealth, PayZen was incubated with Viola Ventures in 2019, with more recent investments coming from Picus Capital, TWO39 Ventures, and others.

“We believe vertically embedded fintech solutions will impact many industries which led us to take an integral part in PayZen’s incubation,” said Omry Ben David, General Partner at Viola Ventures and member of the Payzen board. “The $3.7 trillion US healthcare industry is ripe to be disrupted with affordable, transparent, and inclusive patient payment plans, driven by data and AI, offering a real win-win for providers and patients, with no fine print.”

PayZen is based San Francisco and has secured more than $200 million in debt financing commitments from capital providers.