PayZen Secures $32M Series B and $200M Debt Facility to Expand “Care Now, Pay Later” Product

Healthcare costs in the U.S. have been rising rapidly, with patients shouldering an increasing share of these expenses. Two decades ago, patient fees accounted for just 5% of hospitals’ and doctors’ revenue, but by 2017, this figure had surged to 35%. This shift has led millions of Americans to accumulate significant medical debt, now estimated at over $220 billion by the independent health policy research firm KFF.

To address this issue, PayZen, a five-year-old startup, aims to make healthcare more affordable by allowing patients to pay their bills in interest and fee-free installments. Branded as “care now, pay later,” PayZen’s product has gained strong traction, with revenue growing six-fold annually over the past two years.

This growth has enabled PayZen to secure a $32 million Series B funding round led by NEA, with participation from existing investors like 7WireVentures, Signal Fire, and Viola Ventures. Additionally, the company has obtained a $200 million warehouse credit facility from Viola Credit and a syndicate of insurance companies. This funding round values the company at over $200 million.

PayZen’s solution also benefits healthcare providers, who see a 35% increase in collections rates on average. Founder Itzik Cohen acknowledges that convincing healthcare providers to adopt a “buy now, pay later” model was initially challenging due to the complexity of the market.

Unlike its competitors, PayZen integrates its medical loans directly into patients’ medical record portals, such as Epic’s MyChart, providing a seamless experience. The company currently collaborates with over 60 health systems and large physician groups, including Pennsylvania’s Geisinger and multi-state Common Spirit.

In addition to post-care loans, PayZen has introduced a pre-care card to help patients manage upfront costs for scheduled procedures. The company also leverages data and AI to assist health systems in identifying patients eligible for government financial assistance.

Cohen emphasizes PayZen’s mission-driven approach: “We have people joining us because of our mission. We go to sleep every night knowing that we’re making a good impact on the world.”